Market Stress Echo's 2005-2008 in 2022-2025

Found a correlation between ES1! futures and SPY equity flow of money between the two, starting with 2004

Starting at the first vertical divider one can observe a "sawtooth wave" in RSI naturally known for its robotic sequence. Up to 2008 where this automation stopped. After 2008 we see normal movement in the market, aka "human randomness of noise (buys/sells)" or as I like to call it "human trading" during 2009 to 2016 has less of a robotic movement than between 2004-2008.

Finally we see that in 2022 this sawtooth wave again re-appeared (consider trying ES1!/SPY and observing those time lines on a Daily Chart, you will be surprised at the smoothness of the sawtooth wave.

What does this show me? Is it a crash? Not certainly, however when liquidity is at its max with lower than usual volume (Considering printed money has gotten us out of market liquidity limitations aka bank stimulus in 2008 and buybacks the years after) we can conclude a similar event is unfolding.

At least, we see a pattern and we know what happened at the end of the previous sawtooth waveform.

Will length be similar? Will there be the same amount of waves? This is up to fundamentals and liquidity left in the market after everyone and their grandmother have thrown all their cash in equities (including Europeans currently being the new fish in the pond). No way to predict the end of this liquidity cycle, but I'm watching a break in the form.

Another good use on the smaller timeframe daily candles is to watch ES1!/SPY for reocurring green or red candles (green normally means ES1! gains liquidity, Red normally means SPY gains liquidity).

Example: If 4 green candles in a row, high probability 5th green candle with be red giving another probability tool for downward daily scalp. In the same light if 4 red candles in a row, higher probability 5th will be green giving low risk high reward daily scalp call.

While this tool is great for scalping and complementing existing tools like supports/resistances/technical patterns/RSI/EMA's/VWAPS in the short term. In the long term this ES1!/SPY can show interesting patterns that only seem to pop up before major crashes, looking closer one can notice the same loose pattern pre-2000 dot com crash.

Since the majority of the market has begun automatically trading using algorithms and over time increased in this automation, this leads me to believe this signal to be even louder than in the past: dot com vs GFC vs current day repetition.