"The market will likely decline further today but we are very close to the end of this short term decline. S&P will have a strong support around 3850ish. If you are fortunate enough to have shot the market in the past few days then this is a point you probably better take a profit. I think the market may likely start to bounce back as soon as by the end of today or tomorrow."
This was the message I posted to my chat group this morning before opening. Of course I was wrong, timing-wise again by a few hours, but this time I underestimated the market's urge to rebound. It actually started to bounce back before noon and carried out the strength till the end of the day! Here is what the market did today: S&P plunged 36 points to $3853 shortly after the opening😨 but miraculously shot up nearly 60 points from its intraday low and closed the day by 20 points higher. Really fainting😇. So in my trading Family, we did take nice profits from the short trades placed in the past few days, including an overnight income trade, and nearly precisely at the bottom today we opened a long position to anticipate the rebound. So far so good!✌💪
Considering all the short-term momentum indicators, I think the market (S&P) will be moving up towards 3940ish in the next few sessions but likely in a choppy fashion. But by no means we are totally out of the woods already. Longer term there are still concerning signs flashing out there. Below are just two warnings!
by SentimentTrader:One of the major developments we've been watching for since there was overwhelming evidence of excessive optimism is weakening internals.
That can take any number of forms, and for the most part, we haven't really seen it until very recently.
One of the clearest ways to look for this is the net percentage of securities on the NYSE that reach 52-week highs versus 52-week lows. After the surge in new highs in early March, there was a minor divergence as those figures weakened even as the S&P 500 made a new high, but it wasn't major.
More concerning is that by Tuesday, there were more 52-week lows than 52-week highs. We don't care that it was caused by a fall in SPACs or any other excuse - there's always something.
The reason we shouldn't expect a protracted divergence this time is simply how far stocks have traveled. Across all the major equity indexes, and throwing in over-the-counter stocks just because they have seen such a tremendous surge of interest, the median stock is up more than 100% from its lows.
Then the big money (institutions) is flowing out of the market for now, which is often the leading indicator to the market direction.
PS: While I cannot share my specific trading ideas outside my DW Family, I do post some important messages from time to time about market conditions and trends in advance in my chat groups. If you also want to get such messages, you can join my SafeChat group. My WC group has been partially blocked from adding new members.
I have registered as 深山老林 at SafeChat (SC) (You need to download the SafeChat app first) and have set up a new SC chat group. I'm gradually shifting our major social media interactions to SC instead of WC. If you'd like to join my group, sign up a free SC account easily and search for me and connect me as friends. For friends sharing similar conservatism views, let's come together to form a better chatting group that won't be constantly disturbed and harassed by the insane radical censorship!
No comments:
Post a Comment