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Creslin

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Blazin said:
View attachment 411187

We have been below the 200d avg for almost 6 months now. That's not a great look. Fear is at extreme levels. Because with every 10-20% correction there is always the thought, "Is this a corrective period in a larger uptrend (2018) or is it a full fledged bear (2008)." You will never have a 20% correction that you aren't left wondering if it is going to steepen.

Here is 2018 correction:

View attachment 411189

We spent five months battling below the 200d and were able to recover it and go much higher.

Now in 2008:
View attachment 411188

We battled below the 200d for 8 months and just could not recover the trend and went on to much lower levels.

The longer we stay under the 200d the more probable the 2008 scenario becomes. So this begs the question do we have periods of consolidation that were longer that didn't need to flush much lower to reset?

TUNE IN TO FIND OUT...
Click to expand...
The Fed is the major wild card now in any comparison to 2018. The 2018 fed was trying to raise rates but was able to back off every time the markets dipped. This fed is trying to fight exploding inflation and unless they throw in the towel on that to save stocks it seems unlikely we will see the bttom before September if not longer.

it seems like the fed wants stocks to crash or atleast flatline if they can thread that needle.
 
Sanrith Descartes

Sanrith Descartes

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Blazin said:
It's times like this for the people with the patience to get through it "earn" the returns they get. It's easy to look at charts in the rear view mirror and say wow just hold from A to B but getting through indecision of corrective periods is extremely challenging emotionally. This market behavior is why so many people underperform, because they just can't get through it without doing self harm to their portfolio.
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The time to buy is when the blood is running in the streets.
 
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Blazin

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I have mentioned before that 2015-2016 corrective period was one of the most challenging periods for secular trend investors. We struggled above and below the 200d for 11 months before the primary trend resumed. It's an important point to notice that the market successfully got on top of the 200d multiple times. While challenging this was a more "constructive" consolidation behavior than what we have seen so far in this correction.

Capture3.JPG


This 2000 Bear market:

Capture4.JPG


The Market lost the 200d and despite repeated attempts to rally each just met with more selling and we eneded up with significant space between price and the then declining 200d.

So which chart do we look like most? Well right now today, we look more like 2000 and 2008 than we do the healthier corrections. That is the chart in front of us. Each month we spend without a substantive rally back to or over the 200d the more perilous this becomes. We are on the cusp now. Can we stomach a decline of SPY 380 QQQ 290ish and still hold? I'd say yes, but it better happen soon with a strong and SUSTAINED bounce out of that extreme trend danger zone.

This month is crucial and I don't say that lightly. I am exercising patience and I won't abandon the trend easily, but I have always said weigh the evidence, look at the evidence in hand, don't marry an idea. Wish I had better news but we are in hard decision time coming up.

Can you just hold through a bear market? Most likely the answer is yes if you are not in retirement, selling and waiting for a new uptrend to resume can take awhile and you may end up missing 5-10% or get whip sawed by bear market rallies. It's a tough game to play.
 
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Zzen

Zzen

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Blazin said:
I have mentioned before that 2015-2016 corrective period was one of the most challenging periods for secular trend investors. We struggled above and below the 200d for 11 months before the primary trend resumed. It's an important point to notice that the market successfully got on top of the 200d multiple times. While challenging this was a more "constructive" consolidation behavior than what we have seen so far in this correction.

View attachment 411197

This 2000 Bear market:

View attachment 411200

The Market lost the 200d and despite repeated attempts to rally each just met with more selling and we eneded up with significant space between price and the then declining 200d.

So which chart do we look like most? Well right now today, we look more like 2000 and 2008 than we do the healthier corrections. That is the chart in front of us. Each month we spend without a substantive rally back to or over the 200d the more perilous this becomes. We are on the cusp now. Can we stomach a decline of SPY 380 QQQ 290ish and still hold? I'd say yes, but it better happen soon with a strong and SUSTAINED bounce out of that extreme trend danger zone.

This month is crucial and I don't say that lightly. I am exercising patience and I won't abandon the trend easily, but I have always said weigh the evidence, look at the evidence in hand, don't marry an idea. Wish I had better news but we are in hard decision time coming up.

Can you just hold through a bear market? Most likely the answer is yes if you are not in retirement, selling and waiting for a new uptrend to resume can take awhile and you may end up missing 5-10% or get whip sawed by bear market rallies. It's a tough game to play.
Click to expand...

Thank you for your service brother.


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wormie

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Brandon signaled that he is going to start WW3 or that he is a total fucking retard. That cost probably 1-2%. The rest? Who the fuck knows, fear?
 
Blazin

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Creslin said:
The Fed is the major wild card now in any comparison to 2018. The 2018 fed was trying to raise rates but was able to back off every time the markets dipped. This fed is trying to fight exploding inflation and unless they throw in the towel on that to save stocks it seems unlikely we will see the bttom before September if not longer.

it seems like the fed wants stocks to crash or atleast flatline if they can thread that needle.
Click to expand...
Worrying about the "why" is a complete waste of time and adds no value. Tilting at windmills. If I'm fearful of X or I'm fearful of Y has no real bearing on how a human will respond to that fear. Fear and sentiment are what they are, discussing how we get to those feelings plays little productive role in rational investment decisions. Markets are 100% a sentiment weighing machine, the price action is the net aggregate opinion of all participants over time. We like to understand what we feel is the why but that should never be used to determine a course of action.
 
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Blazin

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So bear porn time:

If the primary trend fails how deep of a drop are we looking likely facing? During declines I like to look at sectors of the market as different parts of a train. The speculative growth started this decline last February. With most of this group down near 60-70% already, with many names giving up the entirety of their Covid March'20 moves. Then financials rolled over, now more recently followed by big Tech. The Value trade has held on so it's the caboose. A bear market takes no prisoners, nobody is spared. So IF this is a bear market, it comes for all, one at a time as people try to hide. If we leg lower it will be with big tech pain increasing with 15-20% more decline, maybe another 8-10% for financials and we should then see value begin stronger declines. This should see stocks like Pepsi, PG, KO etc declining 10-12% further.

For indices I think this means they give up the entirety of their post election moves, bottoming around QQQ ~260 and SPY around 340. This is not that bad of an outcome if that's how it plays out. Spending maybe another 12-15 months after that low getting back into 2021 ranges . It will suck, bears still won't be satisfied and will be looking for a retest of march-2020 lows so they will completely miss the bottom like they always do. They will then spend the next 5 years of gains complaining the market is rigged.

This is just looking at outcomes and being prepared for the possible. This is NOT my default play at this time, there is still a chance we stop right here, maybe even today. One day at a time, no bias and just paying attention to the weight of the evidence to help steer the ship.
 
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Lightning Lord Rule

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Blazin said:
So bear porn time:

If the primary trend fails how deep of a drop are we looking likely facing? During declines I like to look at sectors of the market as different parts of a train. The speculative growth started this decline last February. With most of this group down near 60-70% already, with many names giving up the entirety of their Covid March'20 moves. Then financials rolled over, now more recently followed by big Tech. The Value trade has held on so it's the caboose. A bear market takes no prisoners, nobody is spared. So IF this is a bear market, it comes for all, one at a time as people try to hide. If we leg lower it will be with big tech pain increasing with 15-20% more decline, maybe another 8-10% for financials and we should then see value begin stronger declines. This should see stocks like Pepsi, PG, KO etc declining 10-12% further.

For indices I think this means they give up the entirety of their post election moves, bottoming around QQQ ~260 and SPY around 340. This is not that bad of an outcome if that's how it plays out. Spending maybe another 12-15 months after that low getting back into 2021 ranges . It will suck, bears still won't be satisfied and will be looking for a retest of march-2020 lows so they will completely miss the bottom like they always do. They will then spend the next 5 years of gains complaining the market is rigged.

This is just looking at outcomes and being prepared for the possible. This is NOT my default play at this time, there is still a chance we stop right here, maybe even today. One day at a time, no bias and just paying attention to the weight of the evidence to help steer the ship.
Click to expand...
So you're saying tomorrow will jump back up by 5%??

tenor.png
 
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Lightning Lord Rule

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Shitposting aside, I've been adding index buys in small increments on these down days. If and when we get another relief rally up to say 360-370 QQQ (or maybe even lower like 355) in the next 8 weeks, I'll likely sell a good chunk of that in an effort to ride this up and down channel we're in. OR, if we get signals that it's not just a very temporary rally, hold it for a while.

Alternatively, if we get the move down to 380 or 340(!) SPY like Blazin Blazin is talking about, then I'll likely keep adding small amounts on the way down to those levels. MAYBE it's smarter to take a short position like SQQQ, but holy shit is it also riskier. We'll have to see how it plays out.

Today was certainly eye-watering when it comes to overall moves though, wow. 5% index move in one day is nothing to sneeze at even in clown world.
 
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