2nd Year of an Even Decade ... Best time to Buy?

[bpcw]

Is the current crypto massacre a sign of how things will play out for stocks?

[bpcw]

Ok so crypto's current demise down to the FTX exchange collapse, answered my own question!

[Jaz]

Anyhow, I am uncertain/anxious. Previously, this has indicated a bottom.

There's a bit on an interesting pattern I've been watching, among many others.

Taking into consideration your posts here in this forum as well as the AITT forum, you tend to post a lot of charts near important turning points in the markets.

For example, from what I remember, you posted a lot of bullish charts regarding the Nasdaq (e.g. projecting going to 17k+, etc.) around the time the Nasdaq topped above 16k, on the AITT forum.

Similarly, you've recently posted more on this forum, usually bearish scenarios.

Tradeable bottom's likely in, assuming s&p 3600 holds on a weekly closing basis.



Not meant as an insult in any way. I just have a bunch of unusual sentiment indicators I record, including those involving my own posts.

That is a valid observation Dean.

Yes, late last year I was seeing some very similar parallels with the 2000 Dotcom, and thought we were about to go super parabolic, already knowing valuations were getting silly, but I got greedy.

Now we have a parallel with 2008. It is possible Mr. Market is playing out the trick again. Making the participants think the market is about to collapse, but takes off in the opposite direction.

On the contrary, Mr. Market may be playing a trick. If enough participants think the Market will not collapse, Mr. Market will pull the liquidity, and down we go.

[Jaz]

So as stated there are several scenarios two stand out.

First, the war of attrition continues, and the June 2022 lows hold on a weekly basis. This might actually be worse than the second option because while the indices rise and fall, more stocks will fall than will rise. For example, take stock ABC, the Dow tacks on 2000 points, the stock gains 15%. The Dow then drops 2200 points over two weeks, and the stock sheds 10%; it then reports good earnings, but nervous nellies want more, so the stock sheds 30%. The Dow tacks on 3000 points again, but the stock is still down 16%. Many stocks follow this pattern; this is sometimes referred to as a silent bear or a silent massacre, where the indices mask the true extent of the slaughter.

The second option

Care to guess why bonds are still not rallying as fast as they should? There should have been a massive counter-rally in play by now. One of the new reasons is that investors pull money out of bonds and money market accounts and buy more stocks. In other words, they are attempting to act like contrarians. This is a big No-No for the big players. Heaven forbid the small guy masters the simple secret of embracing crashes. In this scenario, the big players create a nice counter-trend rally, which is in play now. The rally is quite strong, and the Dow might even test the secondary, albeit higher, but lower probability targets of 35K. Currently, these higher targets have since moved into the medium probability zone. By taking the Aug highs out would create the look that a new bull is potentially underway, and shortly after that, the markets will pull back softly at first and then gain momentum.

If this trick is employed, the indices will trade decisively below their June lows, even for a brief period. This is the only way to break the mindset of the masses and reinforce the old belief that one should run and sell everything when the market is crashing.

Lastly, while the crowd is anxious, their anxiety is manageable; it has to get out of control. Neutral readings of 53 plus indicate that the crowd is close to hitting the learned helplessness stage; this happens when your anxiety levels go through the roof, but you don’t know what course of action will alleviate them, so you break down.

Bearish sentiment is also not at very high levels. It would need to get to 60 several times (ideally 65) to indicate an extreme inflexion point has been hit.

It seems the first option is playing out. Indices bottom in October, but since then, various stocks have made new lows. Examples being, TSLA, META, MSFT, TSM, Cathy Wood crap, etc..

Your second option could also play out. Too early to tell.

I assume it is possible for your neutral and bearish readings to go to the ideal highs without the main indices making new lows?

[chippermon]

Consider this.

As witnessed recently through it's Interest Rate Policy announcements and it's subsequent confusing presser and other governor talks, the action in the DXY, 10yr yield and USD crosses, the FED has blown it's load prematurely and is now running out of options for market manipulation in the shorter term. I'm not sure if the upcoming CPI will be enough to move markets and the economy the way they want it to go. Just a guess. It needs another avenue of market sway.

It would allow their usual methods of manipulation to have a rest and regain some of their power to use more effectively to accomplish what they want. I feel investors my be growing more complacent in their reactions to FED moves.

What if China eases it's Covid policy lockdowns? This would allow the DXY to retreat little. Let equity markets make some nice gains. Get that IXIC up to 11,350. I still see a lot of this buy the dip mentality and that doesn't sit well with the PTB. It would allow industrial metals prices to start some base building. Next phase of the market super cycle.

Then create the next black swan event. The Italian Bond Market (largest in Europe and working it's way into a liquidity crisis as you read this). This could be the excuse the FED can use for the looming liquidity crisis in US bonds that it has created and let get out of control. The Guilt has given us a taste of what possibilities there are, more recently. Then cue the rush to USD and the subsequent collapse of the bond market and equities market so they can mop up the blood with their Andrew Jacksons..

Crypto will be temporarily done. BTC 12300. Investors will need the money they have in digital assets to cover their margins.

Just thoughts

[chippermon]

It seems the first option is playing out. Indices bottom in October, but since then, various stocks have made new lows. Examples being, TSLA, META, MSFT, TSM, Cathy Wood crap, etc..

Nasty right?

You could throw a hand full of others in there too. GOOGL MSFT and the worlds largest stock AAPL (80.56?). If Apple breaks 130 look out below. I'm keeping an eye on that one. If it does we may revisit the 2008-2009 lows. I said may.

Hey, not all doom and gloom eh? Many ways to skin a cat. Embrace the volatility.

[Yodean]

...could be the excuse the FED can use for the looming liquidity crisis in US bonds that it has created and let get out of control.

my2c:

-the Fed is in full control; it _wants_ U.S. bonds at low valuations, w/ rising interest rates; this makes King USD even more attractive as an asset for foreign capital flight to safety (e.g. foreign capital slowly goes to USD, then U.S. bonds, etc.);

-the Fed also likes to help the banks; banks generally lend at the long end of the yield curve, while borrowing at the short end; since the short end of the curve is rising in order to fight inflation, the banks benefit from the long end going up as well - i.e. steepening yield curve; ergo, the Fed doesn't mind long bonds cheap;

-most importantly, the USD has been weaponized for geopolitical purposes; with rising interest rates across the entire yield curve, this results in tremendous pressure on ROW (rest of world) - eurodollar debt system.

-eurodollar debt system is a deep topic, but the basic idea is that a lot of loans between foreign entities is denominated in USD (e.g. say an institution in France lends a few billion USD to another institution in Brazil), so as Fed raises interest rates and USD goes up, the ROW gets basically, smashed in face, with eurodollar debt defaults, deleveraging, etc. - also can think of this as ROW USD shortage ...

-so many countries are under pressure (BOE, BOJ, ECB, PBOC, emerging markets, etc.) from this; to get temporary relief, they may have to kiss Uncle Sam's arse, by begging to use Fed's "swap lines" - Fed lends them some USD at decent rates;

-in return, these countries have to do what Uncle Sam wants (e.g. continue attacking Russia, demonize China, etc.);

-as for BTC, it looks headed to a very strong zone of support i mentioned months ago - 12k to 15k - which would represent a Grandpappa of All Buy Signals; below 10k would be the Blockchain God Trigger (BGT) buy.

-as for previous analogs, i tend not to take them too seriously (i.e. 2008-9, 1973-4, etc.); if anything, i think we're headed for a period that's a bit of a hybrid between the sideways consolidation period post-dot.com bubble burst, mixed with the crazy bull market of the 2010s;

[Budge]

Dow, NY Composite and maybe R2K look better than Nasdaq. Looks like Nas will bounce between 11250 and just under 10K but the Nas has to hold the 9960s.

[SOL]

The first chart is of the Monthly chart of the Dow utilities via IDU and the second is the monthly chart of the DOW via DIA.

I am not going to explain the chart. Look for patterns. Think of the Tactical Investor version of the Dow theory.

[MarkD]

Utilities led the way up to a lower high on the indicators, now rolling over. Suspect any equity rallies on Dow, etc, falter and will be confirmed by mo indicators as well.

Once Dow falters utes likely will go from o/s to a new mo high confirmed by ATHs? Other equities will bottom and follow to new ATHs, but we have some months b4 that occurs.

Might add Utes about to break below the middle of the bands (20 ema?), while dow is rebounding atm off this level.

[Jaz]

Sol, your charts are suggesting we go lower, no?

Interesting chart below. It is the Nasdaq 100 divided by SP&500, with Divy's reinvested. Suggested Nasdaq is in for some relative strength. You can see a 1-2-3 Elliott Wave pattern, with 4th in motion.

Interesting how Wave 1 (bottom) begun exactly 20 years ago (Q4 2002)!!

What do you all think?

[chippermon]

...could be the excuse the FED can use for the looming liquidity crisis in US bonds that it has created and let get out of control.

my2c:

-the Fed is in full control; it _wants_ U.S. bonds at low valuations, w/ rising interest rates; this makes King USD even more attractive as an asset for foreign capital flight to safety (e.g. foreign capital slowly goes to USD, then U.S. bonds, etc.);

I agree with this. I just think they got their timing wrong and are re adjusting.

-the Fed also likes to help the banks; banks generally lend at the long end of the yield curve, while borrowing at the short end; since the short end of the curve is rising in order to fight inflation, the banks benefit from the long end going up as well - i.e. steepening yield curve; ergo, the Fed doesn't mind long bonds cheap;

-most importantly, the USD has been weaponized for geopolitical purposes; with rising interest rates across the entire yield curve, this results in tremendous pressure on ROW (rest of world) - eurodollar debt system.

Totally agree with you here

-eurodollar debt system is a deep topic, but the basic idea is that a lot of loans between foreign entities is denominated in USD (e.g. say an institution in France lends a few billion USD to another institution in Brazil), so as Fed raises interest rates and USD goes up, the ROW gets basically, smashed in face, with eurodollar debt defaults, deleveraging, etc. - also can think of this as ROW USD shortage ...

-so many countries are under pressure (BOE, BOJ, ECB, PBOC, emerging markets, etc.) from this; to get temporary relief, they may have to kiss Uncle Sam's arse, by begging to use Fed's "swap lines" - Fed lends them some USD at decent rates;

-in return, these countries have to do what Uncle Sam wants (e.g. continue attacking Russia, demonize China, etc.);

Yup, that's exactly how they got to where they are now. This has been going on for decades. That's how the PTB take over whole country's infrastructure, resources, etc. So far that's been the IMFs purpose in life

[SOL]

Sol, your charts are suggesting we go lower, no?

Interesting chart below. It is the Nasdaq 100 divided by SP&500, with Divy's reinvested. Suggested Nasdaq is in for some relative strength. You can see a 1-2-3 Elliott Wave pattern, with 4th in motion.

Interesting how Wave 1 (bottom) begun exactly 20 years ago (Q4 2002)!!

What do you all think?

The utilities have a very interesting pattern, which seems to be more pronounced after a big runup. They lead the way up and or down. So they suggest more downside, as was the case in 2008-2009, 1973-1974, etc. However. I don't rely only on TA; the sentiment and MP factors should also line up. But when several studies/tools that are not widely used start to point in a certain direction, the probability of that development coming to fruition rises.

In regards to Elliot wave I never studied that deeply, so I am in no position to comment, but the chart is interesting. From my point of view, it suggests one more downward wave which will culminate in a fantastic buying opportunity.

[Budge]

The first chart is of the Monthly chart of the Dow utilities via IDU and the second is the monthly chart of the DOW via DIA.

I am not going to explain the chart. Look for patterns. Think of the Tactical Investor version of the Dow theory.

Indicators work better for oversold than overbought.

Most recent oversold in DIA would indicate counter move soon although only confirmed by IDU's RSI(?) not MACD.

Last move, major divergence between price and indicators.

When indicators/price don't behave as they indicate, look to the longer cycle effect.

[Budge]

Sol, your charts are suggesting we go lower, no?

Interesting chart below. It is the Nasdaq 100 divided by SP&500, with Divy's reinvested. Suggested Nasdaq is in for some relative strength. You can see a 1-2-3 Elliott Wave pattern, with 4th in motion.

Interesting how Wave 1 (bottom) begun exactly 20 years ago (Q4 2002)!!

What do you all think?

Beauty is in the eye of the:



...bee holder