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How bear markets act


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#1 skott

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Posted 06 January 2023 - 11:34 AM

one of the traits of a bear markets are short, sharp up days/weeks. What I find highly odd and not encouraging for the Bulls is the low VIX despite S&P having a 20% drop in 2021.

 

It is rare to have two consecutive years of stock market declines BUT when it happens the 2nd year is worse than the first year.

 

2021 / 2022 were years of massive inflows of money. This dumb money coming in at the top. 2021 inflows was more than the whole previous (at least ) decade of inflows. That is an incredible stat.



#2 pdx5

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Posted 06 January 2023 - 11:36 AM

one of the traits of a bear markets are short, sharp up days/weeks. What I find highly odd and not encouraging for the Bulls is the low VIX despite S&P having a 20% drop in 2021.

 

It is rare to have two consecutive years of stock market declines BUT when it happens the 2nd year is worse than the first year.

 

2021 / 2022 were years of massive inflows of money. This dumb money coming in at the top. 2021 inflows was more than the whole previous (at least ) decade of inflows. That is an incredible stat.

What are you expecting for a SPX low in 2023?
 


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#3 skott

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Posted 06 January 2023 - 11:46 AM

I'm not smart enough to know that but if 2023 is worse than 2022, it would be likely for the S&P to reach 2900 or lower. I do expect a very large rally after (we reach a meaningful low) but then the bear resumes. Look back at the year 2000 for clues. This all presumes we survive as a Republic and the world does not nearly blow it self to smitherines.


Edited by skott, 09 January 2023 - 10:26 AM.


#4 skott

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Posted 06 January 2023 - 12:13 PM

thinkorswim Sharing (tos.mx)



#5 skott

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Posted 06 January 2023 - 12:24 PM

I've been away so long Ive forgotten how to post charts. I'm not sure if you can see the one above but it shows how the Naz100 has been testing a very key LONG TERM support. so far it has held.

 

For those looking for a short, take a look at MSI. PE is 39 or so. Just tested support that has turned into resistance (264). Also it retraced 62% of the decline and closed the open gap that was above.  just saying. not a recommendation


Edited by skott, 06 January 2023 - 12:59 PM.


#6 skott

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Posted 06 January 2023 - 11:37 PM

I should have respected more the daily sentiment numbers that is showing too much pessimism. And i dont like how the December highs were taken out. Unless something bad happens over the weekend or the full moon  causes a reversal immediately, there is risk of more rally



#7 K Wave

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Posted 07 January 2023 - 02:34 PM

 

For those looking for a short, take a look at MSI. PE is 39 or so. Just tested support that has turned into resistance (264). Also it retraced 62% of the decline and closed the open gap that was above.  just saying. not a recommendation

Thanks for bringing that one to my attention.

 

Needs a break of 255 though before that potentially massive divergent double top is sealed in.

 

Monthly

 

msi.jpg

 

Likely all comes down to whether or not we get the 15 min throwover here early next week. If that does not happen, then more upside could still be in the tank.

 

msi.jpg


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#8 skott

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Posted 07 January 2023 - 06:20 PM

Agree  kwave



#9 skott

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Posted 09 January 2023 - 12:25 PM

As I noted elsewhere the US Dollar is testing it's December low. Gold appears to be reversing, having been as high as 1886 now 1875 and miners fading (rish off trade) Bonds are up.  The full moon only works 60% of the time. A reversal lower today would be considered a success for the full moon indicator if it at least does make a turn from having been going up to going down. I'm down 1.4% on my shorts (today) ATM.  up 3% since I put them on, averaged out.

 

The most logical thing it would seem would be a fading down into the CPI news and then we get some volatility one way or the other. The other possibility is a rise into it and then it could crash or keep going on the news.  I hate trading when it's difficult. 



#10 skott

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Posted 09 January 2023 - 12:29 PM

added 25% to my SMH short. so much for caution.