Déjà Vu: Echoes of 2018 in Today’s Market

I’ve spotted a striking resemblance between the current price action and the 2018 market structure. This emerging fractal might be a key to anticipating what comes next.



🧩 Similarities between the 2018–2020 and 2025 corrections SPY MES1! SPX500USD ES1! SPX :

Technical similarities:

• Drawdown depth: roughly ~21% from peak to bottom
  
• Correction shape: similar wave structure — a double zigzag (dZ)
  
• Reversal dynamic: V-shaped bottom followed by a smooth, rounded recovery to ATH without sharp retracements
  
• Behavior around key MAs:
  – test of the 200-week MA as support
  – brief breakdown below the 200-day MA, then quick reclaim (fake-out)
  
• Volume profile: increased volume during the selloff, resembling capitulation before reversal
  

🌍 Key macro parallels:

• Fed tightening cycle: Both periods saw interest rate hikes and QT against a backdrop of strong economic data.
  
  
• Policy shift: In both cases, Powell started with a hawkish tone and softened it after the correction (2019: “mid-cycle adjustment” with three rate cuts).
  
  
• Strong labor market: Unemployment hovered near 50-year lows (~3.5% in 2019; 3.4% in 2023), suggesting an overheated economy.
  

🌐 Trade risks: 2018 vs 2025
– 2018: escalation of the US–China trade war
– 2025: rising global protectionism, supply chain pressures, and tariffs
This leads to higher costs → margin compression
In both cases, risks to global demand and corporate earnings

This fractal aligns well with both of my long-term wave count scenarios:

Base scenario:

We’re inside a large impulse, where wave 3 is experiencing a classic extension. This implies the bull market could stretch into the 2030s, with smoother phases of growth and distribution. In this view, the current structure resembles a second wave forming as an rFL.

Alternative scenario:

The ongoing correction is wave 4 of a large cycle. After this volatile phase, a final rally — the terminal wave of this supercycle — is expected to follow.