I guess anyone betting for a upside market this week must be suffering painfully for most of the week. I have to admit that I was wrong by expecting a more upside than downside for this week. It happens from time to time that Mr. Market just wants to go its own way regardless what I'm thinking and expecting. How can we be bullish when there is endless bad news on all aspects: unresolved US-China "trade war", impeaching Trump movement, an unexpected declining manufacturing index (ISM), potential new trade tariffs with EU, accelerating slowdown of the economy everywhere else.....just name a few. So we see more panic talking about the upcoming recession that may be coming sooner than later, which obviously is not great for the stock market. I got it and I do believe the risk for the market is indeed quite high for the moment. As I have said for quite some time, Oct is not a good month at all; actually it is the worst seasonal month in general. And I still believe we will see more downside pressure in a few weeks time towards the end of the month or even Nov, depending on how things are unfolding. But dose that mean we will see a collapse right away from here? I don't think so. Actually the severe selloff this week has caused sufficient pain for most of people with a widespread panicky mood we haven't seen for quite some time, leading to a quite significant oversold condition which tends to mark a temporary bottom for now. So I managed to send a note to my friends yesterday (Wed) that I believed a turnaround would be "just a spit distance if not as soon as by end of the day". No, it didn't come by the Wed closing. Actually today we saw another panicky selling at opening. Well, I was glad to see that as for me it was a greater opportunity to trade for higher!
But I'm telling you, it was really painful these days for me; as while I'm greatly enjoying the beautiful scenic journey on the Russian river, the Internet connection is quite painfully spotty and choppy, just as unstable as like the stock market! But fortunately I still managed to buy some yesterday and added more early this morning (US time). The buying process was just like a slow motion movies: I had to wait many seconds between clicks. Oh, gosh! It is just too painful but thanks God, I still had the connection not interrupted during the process.
Here is my prediction: I think the oversold condition is strong enough for a quick rebound in the magnitude of 100 points or so for S&P500. If I'm right, we may see this within just a few days!! Of course, don't count on me as tomorrow's jobs report is a wildcard that may easily derail the "dead cat bounce" that seems to be starting today. But I still believe my TA even though it betrayed me a bit early this week. Let's see how it plays out tomorrow and next week.
By the way, as I have said, Smart Money Has Never Been Wrong, which has been proven right again this time for the gold correction. Be cautious for gold/silver right now!
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