Post about: Technical Analysis of the Market
Post Nº: 1
Dear Followers and Copiers,
I share with you this great post from @SmurfTrading.
** He uses 60 and 100 SMA, I like to use 50 and 150 SMA, which also show the same pattern (50 SMA cross 150 SMA and both are sloping up)
There are also 2 other Flags that complement to this one, that haven’t already turn green:
-> Price 20% above the bottom
-> Price above 200 SMA (that has happened) but it should be sloping up (that hasn’t yet)
Let’s put it this way, 1 flag is a 90% probability that we are heading to a new Bull Mkt, 2 flags 95% and 3 almost 100%
In this year strategy, I commented I was increasing our exposure to China Tech, check these flags for example for the $KWEB
As always, future is uncertain and no one can predict where the Mkt will go. Future could and will be volatile, but there are good opportunities already at these levels. Take advantage.
Cheers,
JP... Show More
𝟮 𝗠𝗮𝗶𝗻 𝗿𝗲𝗮𝘀𝗼𝗻𝘀 𝘄𝗵𝘆 𝗜 𝗯𝗲𝗹𝗶𝗲𝘃𝗲 𝘁𝗵𝗮𝘁 𝘁𝗵𝗲 𝗺𝗮𝗿𝗸𝗲𝘁 𝗵𝗮𝘀 𝗮𝗹𝗿𝗲𝗮𝗱𝘆 𝗯𝗼𝘁𝘁𝗼𝗺𝗲𝗱.
𝗧𝗲𝗰𝗵𝗻𝗶𝗰𝗮𝗹 𝘀𝘁𝗮𝗻𝗱𝗽𝗼𝗶𝗻𝘁:
The moment 60SMA (blue) cuts the 100SMA (yellow), and both SMAs are sloping up, this indicates the start of the bull market. Looking back in time since 1957 Eisenhower recession till now, whenever this happens, it is the start of the bull market. This holds true 100% of the time.
𝗙𝘂𝗻𝗱𝗮𝗺𝗲𝗻𝘁𝗮𝗹 𝘀𝘁𝗮𝗻𝗱𝗽𝗼𝗶𝗻𝘁 𝗿𝗲𝗯𝘂𝘁𝘁𝗮𝗹:
Some people told me "but Smurf, corporate earnings are going down. The market will continue the downtrend!"
Yes, I agree that corporate earnings have not bottomed. However, it doesn't mean the stock market has not bottomed!
Looking back at the past recessions, you will notice that the stock market bottomed months before the corporate earnings bottomed. Meaning to say, S&P500 could be going up for another 40-50% before the corporate earnings bottomed!
𝗘𝗶𝘀𝗲𝗻𝗵𝗼𝘄𝗲𝗿 𝗿𝗲𝗰𝗲𝘀𝘀𝗶𝗼𝗻 in June 1957 (Source: BEA, Bloomberg)
S&P500 bottomed in Dec 1957. However, Earnings bottomed in Dec 1958. If one were to wait for earnings to bottom before entering the stock market, he or she would have missed out on a 50% gained.
𝗦𝘁𝗮𝗴𝗳𝗹𝗮𝘁𝗶𝗼𝗻 𝗲𝗿𝗮 𝗼𝗳 𝟭𝟵𝟳𝟬𝘀 (Source: BEA, Bloomberg)
$SPX500 bottomed in Sep 1974. However, Earnings bottomed in Aug 1975. If one were to wait for earnings to bottom before entering the stock market, he or she would have missed out on an ~40% gained.
Not only it applies to these two recessions, it applies for the other recessions as well namely 𝟭𝟵𝟴𝟬'𝘀 𝗱𝗼𝘂𝗯𝗹𝗲-𝗱𝗶𝗽 𝗿𝗲𝗰𝗲𝘀𝘀𝗶𝗼𝗻, 𝗦&𝗟 𝗰𝗿𝗶𝘀𝗶𝘀 𝗼𝗳 𝘁𝗵𝗲 𝟭𝟵𝟵𝟬'𝘀, 𝗚𝗹𝗼𝗯𝗮𝗹 𝗳𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹 𝗰𝗿𝗶𝘀𝗶𝘀 𝗶𝗻 𝗠𝗮𝗿 𝟮𝟬𝟬𝟳, 𝗚𝗹𝗼𝗯𝗮𝗹 𝗖𝗼𝘃𝗶𝗱 𝗽𝗮𝗻𝗱𝗲𝗺𝗶𝗰 𝗶𝗻 𝗗𝗲𝗰 𝟮𝟬𝟭𝟵.
𝗦𝘂𝗺𝗺𝗮𝗿𝘆
No one has a crystal ball and can be 100% certain of the short-term volatility of the market. However, as long as one stick to good companies with excellent economic moat, and that you only buy them when they are underpriced, you will reap the rewards eventually.
Further, having a sound strategy that yield consistent profits despite the volatility of the market (example My swing trading with backtrack records + refinement), you will expedite the asset accumulation process. And if this hold true, one would not want to miss out on $BTC crypto rally which is historically aligned with stock market bull rally as well. ... Show More Translate
