Big bear market bounce
Posted 13 May 2022 - 05:41 AM
Posted 13 May 2022 - 08:18 AM
I will pay attention to time more than to a price level before getting short on the coming bounce's top. So far nasdaq takes one month for a drop and 15 days for a bounce. More or less obviously. If we got a bounce here, at the end of May there might be a short opportunity. But we must watch the indicators as well.....
however my bounce target for nasdaq is 12400, right or wrong the end of May should tell. Difficult that the bearish trend may be over by then, because probably indicators can get even lower
Edited by andr99, 13 May 2022 - 08:22 AM.
forever and only a V-E-N-E-T-K-E-N - langbard
Posted 13 May 2022 - 09:25 AM
I found it is difficult to predict if it is a bear market rally or we have hit bottom... Now a couple weeks ago we had a 1 or 1 1/2 day large rally, which means this one is most likely a bottom of some type. This could be short term bottom lasting 4 to 5 days or a median term bottom... We will need to wait and see...
Posted 13 May 2022 - 10:18 AM
I still think we are in secular bull, just have some bad leadership in charge right now.
yep. secular bull. 5000 still my target then down
Posted 13 May 2022 - 10:55 AM
sincerely I don' t understand what ''secular bull'' means......does it mean the market keeps going up for 100 years with minor corrections in between and then when the 100 years are over it begins a 21 years bearish market (see the fibonacci ratios for the exact time extension) ? Difficult to believe. Secondly if it happens to have not a minor correction but more properly a correction of 50% and more like it was for nasdaq in A.D. 2000, well it took 15 years to recover.......My largest horizon for trading is one year and it's only that that I take into count when trying to understand the possible market price dynamics. I don' t look at any time period longer than that.
Not to be polemical, but this correction is a hard exercise even for the most experienced traders and counting on the underlying forever lasting super wave third epicentric bull, might be dangerous. What if they go down until Fall ?
Edited by andr99, 13 May 2022 - 10:59 AM.
forever and only a V-E-N-E-T-K-E-N - langbard
Posted 14 May 2022 - 11:29 AM
andr99, secular bull is nothing more than effect of excessive money printing.
For example US dollar from when FED was created way back almost 100 years ago,
to now the dollar is only worth a few pennies compared to it's buying power 100 years ago.
So inflation causes stocks to grow in number but not necessarily in purchasing power.
From my observation, stock markets do not do well when inflation is higher than 6%.
So I am not going to act like a secular bull while inflation is higher than 6%.
Posted 15 May 2022 - 12:28 PM
Look at the Tech charts...total destruction...every bit as bad as early-mid 2000, if not worse.
Cancer will spread, just like 2000
Not sure exactly what folks think will save the market with Mega Caps in full blown bear markets...
Edited by K Wave, 15 May 2022 - 12:28 PM.
The strength of Government lies in the people's ignorance, and the Government knows this, and will therefore always oppose true enlightenment. - Leo Tolstoy
Posted 15 May 2022 - 05:29 PM
First, I don't count a bear market by the CNBC invented definition of "down 20%". That's an idiot definition created for a TV audience so they don't have to explain complicated definitions. I consider a bear market as a significant decline in stock prices accompanied by a dislocation of the general economy that last for at least several months, and up to several years (such at 2000-2002).
Bull market tops are characterized by high PE ratio's relative to historical norm (in 2000 the PE on the S&P 500 peaked at 35), and in Dec. that PE was in the low 30 range (I use the 12 month trailing GAAP PE which is all facts and no future estimates), and I take it off the S&P website directly, so from the horses mouth. That PE is high enough that we may have begun a secular bear market, but when a correction begins, nobody knows the duration nor magnitude. We just have to wait and see.
My history shows a secular bull from the mid 1955's to 1969 (14 years), a secular bear from 1969 to 1982 (13 years, PE very undervalued), secular bull from 1982 to 2000 (18 years, PE dramatically overvalued), secular bear from 2000 to 2009 (10 years, to PE very undervalued), and a secular bull from 2009 to today (13 years, PE very overvalued in Dec. 2021).
Clearly a correction has begun. Will it become a full fledged bear market? I don't know, but beginning from such a high PE valuation, it stands a good chance. We just had Q1 at -1.4% GDP, and the Fed has just begun raising interest rates into a slowing economy, that does not look good to me, and we have a long way to go with the rate hikes. We have inflation running at 8% and that is not good. We have a national debt of $31 trillion, and that is not good.
I'm cautious these days.
Edited by Rich C, 15 May 2022 - 05:30 PM.
Blogging at http://RichInvesting.wordpress.com
My swing trades typically last a couple of weeks to a couple of months and I focus on SPY. During the Corona virus bear market I use more sector funds to avoid the bad spots in the SPY such as energy, hotels, and the airlines.