Analysing whats going on here, I believe the medium-term outlook for the market is down
Trapped traders are what fuel big moves. As they panic and close in the red (or get stopped out/margin called), they push the price massively against themselves. Squeezing
Many people shorted the bottom last year, and they were sacrificed to fuel our rise to 12800. Bears got all the life squeezed out of them
But since then, it has peaked. Every rally, even the most ferocious, fails to reach that point. Some smart bulls buy the dips, but they have no confidence, and close out just before the previous peak. New bulls enter at those peaks and get trapped, bagholding longs that will not pay out for the forseeable future.
Today we hit a new low compared to february. Anyone who shorted last month, even at the worst possible moments, is now out clean. And if there was still anyone left over holding shorts from last year, they've had plenty of time to derisk, and to make more money playing this downward slope
This trend cannot continue for much longer. Bulls who entered at each these peaks will panic soon. A bit of bad news or just a sharp movement will send the market into a selling frenzy, and a long squeeze will drive us down to new lows
Note that the red line at the end is not to scale or duration, it will likely be drawn out over a longer period. I don't expect the chart to follow the shape of that line. The point is to demonstrate that this is going down, and its going to keep going down
The market has not bottomed. In the next 3 months I expect we will drop below the previous low of 10400 ish
But the title says second, so where is the first?
In august 2022, a huge rally peaked at 13650
Over the next two months it grinded down back to the dust, making a new low around 10500
Bulls fought for every inch on the downward side, and they all died.
It is happening again
Trapped traders are what fuel big moves. As they panic and close in the red (or get stopped out/margin called), they push the price massively against themselves. Squeezing
Many people shorted the bottom last year, and they were sacrificed to fuel our rise to 12800. Bears got all the life squeezed out of them
But since then, it has peaked. Every rally, even the most ferocious, fails to reach that point. Some smart bulls buy the dips, but they have no confidence, and close out just before the previous peak. New bulls enter at those peaks and get trapped, bagholding longs that will not pay out for the forseeable future.
Today we hit a new low compared to february. Anyone who shorted last month, even at the worst possible moments, is now out clean. And if there was still anyone left over holding shorts from last year, they've had plenty of time to derisk, and to make more money playing this downward slope
This trend cannot continue for much longer. Bulls who entered at each these peaks will panic soon. A bit of bad news or just a sharp movement will send the market into a selling frenzy, and a long squeeze will drive us down to new lows
Note that the red line at the end is not to scale or duration, it will likely be drawn out over a longer period. I don't expect the chart to follow the shape of that line. The point is to demonstrate that this is going down, and its going to keep going down
The market has not bottomed. In the next 3 months I expect we will drop below the previous low of 10400 ish
But the title says second, so where is the first?
In august 2022, a huge rally peaked at 13650
Over the next two months it grinded down back to the dust, making a new low around 10500
Bulls fought for every inch on the downward side, and they all died.
It is happening again
Order cancelled:
as we can see, this idea was dead wrong. Even if it dropped to hades now, it'd still be wrong.
Such is life
Such is life