Talking trends: Previously, we had almost perfectly timed monthly dips (often timed with options expiry) and in days would recover and continue to new highs. First change in the trend was September. We dipped far harder out of channel and took far longer to recover, hell the first bounce was sold. I talked about this and posted charts showing this. By mid-Oct to early Nov, we recovered and rallied hard though. Nov / December was where I really started taking stuff off the table and keeping a keen eye on things. This is where the market started falling apart.
I, personally, dont see the conviction to be going full size, or hell even half in this environment. As a friend has said for over a month now "This is a bear market masquerading as a bull". Most names in the indexes have been breaking 52w lows, while a few heavyweights have held the markets aloft. There's been a great rotation happening for some time now. A lot going on beneath the surface of the indexes. I don't think it is wise going as big on the dips as 2020 / 2021. We are entering a different period.
I do think Q4 earnings can provide some clarity. Quite a few names were just monstering and powering through new highs, despite some not so great news. (F with multiple plant production halts on chips, AAPL with reduced demand & chip issues - for example). Any misses, less than perfect earnings, or bad guidance on the heavyweights will pull the markets.
Maybe its all for nothing and maybe we just rip back to highs.. who knows.. but I think we have some headwinds and this is obviously what the markets have been trying to price in. A Fed rate surprise of .50 vs .25 in March for one thing. Russia taking action in Ukraine can easily gap us down in a big way.
Blazin
I just want to know who Gandalf is in your post? Who's stepping in to bid this market back up?
We are still working on a corrective phase, but bear market bounces can be the most violent. Either way.. volatility ahead. Volatility means opportunity for active traders, but you can lose your shirt if you don't know what you are doing. Always keep an eye on the bigger picture.
