Good morning all. Sunday Morning PSA: Be patient, be prudent, and expect a retest.
This is targeted more at those with a longer-range outlook, e.g. retirement accounts. I stumbled upon the following video last night, he covers some of the same topics we've been discussing in the chat room. Mainly looking at previous corrections (1987, 1998, 2001, early 2008, late 2008, 2011, 2015-2016) for clues how the current pattern may play out.
www.youtube.com/watch?v=SyZem9nq... - "What Does History Say About The Stock Market's V-Shaped Bottom?"
The key takeaway is that we're still under all the important SMA's (50 and up), and they're still sloping down... in other words, Bear Posture.
FOMO is very strong when you see a 10% bounce in two weeks, that's the Greedy Trader in all of us. I'm feeling it something huge, I won't lie. But this video and the reminder of what real, sustainable recoveries look like made me feel better. How little that first 5-10% really is, compared to the scope of a real recovery that could be 50% or more -- meaning Primary 5, or even a new Bull Cycle if our long count is wrong and we've actually topped in P5 already.
Especially notice the parts about resting the lows, SMA's coming together, breaking overhead resistance, etc. The current market has done none of these yet, all we've seen is a low-volume retail-fueled Bear Rally. Institutions bought on Dec. 26 and Jan 3, and are most likely selling to the bag-holders the past few days. Red BOP don't lie.
Also notice the comparison he draws between the current pattern and the beginning of the 2007-2008 decline. I noticed the same thing myself a few weeks ago (link below, "Similarity to 2007-2008"), and there is no change. We had a 10% bounce that time, we have a 10% bounce this time.
Right now the long-term Risk/Reward is skewed heavily toward Risk, until the market tells us otherwise. If we don't retest the lows in the next few weeks, I expect this to eventually play out like 2001. If we get a retest and it fails, the potential for a 2008 repeat is still on the table. But if we get a retest and it holds, and exhibits a pattern similar to the recoveries shown in the video, there's plenty of time to scale back into equities for the long-term.
Thanks for reading, and Happy Trading! $$$
This is targeted more at those with a longer-range outlook, e.g. retirement accounts. I stumbled upon the following video last night, he covers some of the same topics we've been discussing in the chat room. Mainly looking at previous corrections (1987, 1998, 2001, early 2008, late 2008, 2011, 2015-2016) for clues how the current pattern may play out.
www.youtube.com/watch?v=SyZem9nq... - "What Does History Say About The Stock Market's V-Shaped Bottom?"
The key takeaway is that we're still under all the important SMA's (50 and up), and they're still sloping down... in other words, Bear Posture.
FOMO is very strong when you see a 10% bounce in two weeks, that's the Greedy Trader in all of us. I'm feeling it something huge, I won't lie. But this video and the reminder of what real, sustainable recoveries look like made me feel better. How little that first 5-10% really is, compared to the scope of a real recovery that could be 50% or more -- meaning Primary 5, or even a new Bull Cycle if our long count is wrong and we've actually topped in P5 already.
Especially notice the parts about resting the lows, SMA's coming together, breaking overhead resistance, etc. The current market has done none of these yet, all we've seen is a low-volume retail-fueled Bear Rally. Institutions bought on Dec. 26 and Jan 3, and are most likely selling to the bag-holders the past few days. Red BOP don't lie.
Also notice the comparison he draws between the current pattern and the beginning of the 2007-2008 decline. I noticed the same thing myself a few weeks ago (link below, "Similarity to 2007-2008"), and there is no change. We had a 10% bounce that time, we have a 10% bounce this time.
Right now the long-term Risk/Reward is skewed heavily toward Risk, until the market tells us otherwise. If we don't retest the lows in the next few weeks, I expect this to eventually play out like 2001. If we get a retest and it fails, the potential for a 2008 repeat is still on the table. But if we get a retest and it holds, and exhibits a pattern similar to the recoveries shown in the video, there's plenty of time to scale back into equities for the long-term.
Thanks for reading, and Happy Trading! $$$
Comment:
For some reason the call-out balloon disappeared from the chart (but it's in the thumbnail?) "The yellow dots are the 200-Day Price Projection. As long as current price is below them, the 200 SMA will continue falling."
