SP500: 2008 US Subprime crisis vs 1953 US Recession

Published On: February 9th, 2023|Categories: Global Technical Analysis|Tags: , , |By |

There are many investors trying to find a good fractal matching SP500 current price action and possibly find some clues on where are we all heading next.

In this study I have attached two fractals on the SP500 index chart. Note the chart is on the daily time frame on a logarithmic scale.

The first and biggest fractal attached to the SP500 index is the 2008 US Subprime Crisis price action. The second is from US Recession of 1953. I won’t get into details regarding to the economic events but if you would like to learn more about each event just click on the links.

Getting back to the chart, during the last leg of the US Subprime crisis, the SP500 lost approximately 50% of its value and as it can be seen from the chart it was pretty fast and brutal. On the contrary during the 1953 recession, the SP500 lost only 8% during the last leg.

Are we still in a bear market?

Obviously, the US Subprime crisis fractal has been invalidated as price did not follow the same direction the last days of December of 2022. The SP500 price after a small pull back started to extend again higher, which as it currently seems price rolls in a zig zag pattern and possibly in a bear flag formation.

At this stage, the second leg of the SP500 index into the bounce since mid end December 2022, which as we mentioned just above invalidated the US Subprime crisis fractal, seems is rolling inline with the t1953 recession fractal.

Fractal invalidation

The 1953 Recession last price bounce, bounced against the preceding leg down by almost 61.8%, almost the same percent as of today. If price breaks above current highs of $4200’s and continues higher then we will need to invalidate the same way the 1953 Recession fractal we did with the 2008 US Subprime crisis fractal.

In case the SP500 price rolls lower and keeps extending deeper, with the 1953 Recession fractal adjusted to match current price volatility, we should be waiting for an another -15% drop towards the $3500’s by mid April.

If the SP500 breaks the recent highs then I will expect a continuation higher towards the $4400’s, from there evaluate again the possibility of a bear flag as mentioned above.

Trade safe.

Leave A Comment

Websites & Internet

Κατασκευή Ιστοσελίδων και Διαδίκτυο

Front-end web development, content creation, SEO and administration for website and domain.

Introduction to Cryptocurrencies


Discover Bitcoin plus 350 Cryptocurrencies with the safety of

and the service of the Financial Markets Consulting


High Performance Systems

Financial and Business Information Technologies | Dalietos.com

Design and construction of custom high performance computer systems based on specifications and latest technology