The Force is Strong in This One. The Fed vs the Rebel Alliance
Updated
The Empire is strong, Darth Powell’s lightsabre is carving into every company, fund, and bond, but instead of cutting off limbs, his magical weapon is adding them.
What we end up with is a grotesque monster that does not resemble anything in the known universe.
Every right-minded investor knows in the back of their mind that this cannot last.
But while it does last, why not make a profit?
I know many of you are strong bears, even perma bears. However, you need to go big as a bear at the right time or it begins to hurt quickly.
I reserve the right to change from a bull to a bear is the drop of a hat, so don’t be surprised if I change. And you should too, being flexible is key to profits.
What I share here are my thought processes, I do not want or expect anyone to take my advice, make your own mind up what to do with your money.
Technical Analysis & Thoughts
The ISLAND TOP – in technical analysis, this is a serious concern for a major direction change because it depicts the battle between extreme bulls and bears. In this case, the bears won. I guess the feds massive purchasing of Index ETFs, stabilized everything again.
Shock Day
The mauling of the markets on June 11th was huge, although the market has recovered, but this is an important sign. In a normal pullback, 5% loss in a week indicates a serious reversal. I have backtested this back to 1920. This was greater that 5% in a day, a serious shock. Another 1 or 2 of these shocks will be the end of this Goldilocks recovery.
Confidence is everything and we are all feeling very itchy.
ADR is still very positive, the up days are excellent, freakish really, but they are weakening.
RSI and KST are not telling us too much.
MystryBox pointed out that pyjama investors / Ma and Pa investors are pouring into the market, and even the Economist magazine mentioned it this week. A sure sign of a bubble if I ever saw one.
Summary
You expect it, I expect it, the right-thinking rebel alliance of bears see an unsustainable market.
But in the short-term, I am long and making money until Mr. Market tells me to move to cash and short.
Watch out for drops of more than 5% in a week as a tell-tale early signal of a significant move down.
Stay safe traders/investors.
Barry
Like and Follow for future updates via tradingview
What we end up with is a grotesque monster that does not resemble anything in the known universe.
Every right-minded investor knows in the back of their mind that this cannot last.
But while it does last, why not make a profit?
I know many of you are strong bears, even perma bears. However, you need to go big as a bear at the right time or it begins to hurt quickly.
I reserve the right to change from a bull to a bear is the drop of a hat, so don’t be surprised if I change. And you should too, being flexible is key to profits.
What I share here are my thought processes, I do not want or expect anyone to take my advice, make your own mind up what to do with your money.
Technical Analysis & Thoughts
The ISLAND TOP – in technical analysis, this is a serious concern for a major direction change because it depicts the battle between extreme bulls and bears. In this case, the bears won. I guess the feds massive purchasing of Index ETFs, stabilized everything again.
Shock Day
The mauling of the markets on June 11th was huge, although the market has recovered, but this is an important sign. In a normal pullback, 5% loss in a week indicates a serious reversal. I have backtested this back to 1920. This was greater that 5% in a day, a serious shock. Another 1 or 2 of these shocks will be the end of this Goldilocks recovery.
Confidence is everything and we are all feeling very itchy.
ADR is still very positive, the up days are excellent, freakish really, but they are weakening.
RSI and KST are not telling us too much.
MystryBox pointed out that pyjama investors / Ma and Pa investors are pouring into the market, and even the Economist magazine mentioned it this week. A sure sign of a bubble if I ever saw one.
Summary
You expect it, I expect it, the right-thinking rebel alliance of bears see an unsustainable market.
But in the short-term, I am long and making money until Mr. Market tells me to move to cash and short.
Watch out for drops of more than 5% in a week as a tell-tale early signal of a significant move down.
Stay safe traders/investors.
Barry
Like and Follow for future updates via tradingview
Comment
I moved the entire portfolio to cash this morning securing an overall 5% gain. The rally looks to be failing, and ultimately with Corona out of control in the USA, there has to be an impact. The upside reward does not match the downside risk at the moment. I will wait for any clear market signal before re-entering.Comment
This forecast is still holding true. I am in cash, I simply cannot see the upside until the island top resistance is broken. For me, more consolidation in the red box until it finally dawns on the market that the US needs to start stronger lockdown. Then another shocking day >-5%, fear then creeps into the market and down we go below 2,500
Barry D. Moore CFTe Financial Technician
12 Proven Winning Chart Patterns
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MOSES Beat The Market with TradingView:
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12 Proven Winning Chart Patterns
liberatedstocktrader.com/chart-patterns-reliable-profitable/
MOSES Beat The Market with TradingView:
liberatedstocktrader.com/moses
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