Interim Market Update July 28, 2022

[SOL]

Minor Update


The small pullback that I spoke about is almost over and looking at the diagram below. I suspect the markets have or are close to moving between the push and thrust stage. The markets will likely rally to the end of the first week to the 2nd week of August before putting another top; possibly 5-7 days. After that, the market will likely enter the thrust phase, and the rally will likely gather serious momentum.

Kick----Fall-----Base----Push----Thrust----Plateau------Plunge

Prepare mentally now to deal with the coming war of Market Attrition; it sounds scary, but it will only be something to fear if you focus on the short term and, more importantly, listen to the talking heads. The only thing to focus on is the long-term mega opportunity, and the opportunity is going to be quite huge. Embrace volatility because that is the trick the big players will use to fool over 90% of investors that things look sour when they are not.

Positive divergences to focus on; the big players try to make them appear as adverse developments. It almost always fools the masses.


Higher lows; this is a bullish development.
The market puts in new lows, but big stocks such as WMT, GOOGL, MSF, AMAT, K, TXN, etc. put in higher lows.
Market sentiment is extremely bearish
Professional fund managers are negative
Kansas City financial stress index is trading above 2.00

All the above developments should be viewed as positive factors.

[AstuteShift]

Good time to sell bull put spreads in SPX, along with SPX calls for more fire power

The bears are still in shock, eventually they will join the bull crowd and cave in.

The best scenario is to form a higher low and go to the targets of 4200 plus on SPX, to trap the crowd and then dump it in the fall.

These scenarios can make someone very rich, very quickly however risk management is key. Don’t risk all your money and save it for the bigger opportunities when the market dumps

[MarkD]

It ended after hours with the earnings release for AAPL and AMZN. One of our plays popped big time also. I would have closed but my alert doesn't notify after hours. Will pay closer attention but expect the a.m. will provide ample opportunity for the sale.

[SOL]

Markets are climbing a wall of worry; this is bullish and fits with what we stated in June and July that the markets were expected to rally to the 4th quarter.

MSFT, WMT, GOOGL, etc. all rallied after initially faltering. Let's see if QCOM makes a comeback. However, it is still trading significantly higher than the lows set in June and July, so that has to be construed as bullish.

The market also shrugged off Negative GDP and the 75 basis point rate hike. We moved very quickly to the Climbing a wall of worry stage. By logic, we should be close to the Shoot to the stars stage, then the Plateau stage which will culminate with the falling of a cliff of joy phase. One thing to monitor closely now is the rate of change or percentage change in bullish sentiment. In other words, how fast is it oscillating upwards on a percentage basis?


On a personal note, we all at TI hope the markets get smashed (and so should you)after the top in the 4th quarter. Why? It will create an even bigger opportunity. I have purchased top-notch Coffee, tea and several bottles of good booze to celebrate each time the Dow sheds 2K plus points over seven days. When everyone is crying, you should be laughing. The pain phase is always shorter if you are an astute investor. Otherwise, it can last forever in the form of regrets of what you could, would or should have done.

Real Tactical investors should start preparing for a splendid period of investing some time in 2023.

What would the ideal pain phase entail?
A hard and fast first downward move. Then sideways action to fool the masses and experts into thinking that the markets are putting in a base formation to stage a rally. Instead, this base formation will be a secondary plateau. Plateau's lead to plunges. After that, a series of strong counter rallies, followed by equally Solid down days. Ideally, the corrective phase lasts 9 to 12 months, but if one pays close attention, one will see that the markets will likely bottom 3 to 6 months before the corrective phase ends.

Taking a guesstimate based on the available data. I would say that the next mega rally phase (expected to start in 2023) will last at least seven years. It should help create several millionaires, provided one adheres to the basic TI investment Methodology.

[harryg]

You present a convincing scenario (rally then crash) and appear to be getting stronger & stronger in this viewpoint. Even I might be tempted to start cashing in if we get a nice rally in the next couple of months

Additionally, I remember something I think you said a while ago about always having a pile of cash regardless of market conditions, just in case there is a massive opportunity. Apologies if that's not quite what you said, can't find it now.

Would anything invalidate the scenario? For example, however unlikely, if EU & Russia had a nice chat? FED comes out and says no more rate rises, next one will be a cut? Big NG discovery in Germany? TripleT becomes a Jehovah's Witness? Anything?

[SOL]

You present a convincing scenario (rally then crash) and appear to be getting stronger & stronger in this viewpoint. Even I might be tempted to start cashing in if we get a nice rally in the next couple of months

Additionally, I remember something I think you said a while ago about always having a pile of cash regardless of market conditions, just in case there is a massive opportunity. Apologies if that's not quite what you said, I can't find it now.

Yes, this is stated right from the onset in the stated reading material every subscriber is asked to go to. One should always have some cash on hand just in case a mouth-watering opportunity presents itself

Would anything invalidate the scenario? For example, however unlikely, if EU & Russia had a nice chat? FED comes out and says no more rate rises, next one will be a cut? Big NG discovery in Germany? TripleT becomes a Jehovah's Witness? Anything?

One of those three events, especially TTH becoming Jehovah's witness will definitely invalidate the crash phase. Even the markets themselves would be shocked lol. On a serious note, if Europe and the US drop sanctions on Russia and suddenly become buddies, that would certainly provide a strong impetus for the markets to rally as opposed to plunge

However, I suspect the Fed has aggressively raised rates because it wants to be in a position to make sure Europe remains under the bus. In order to do that, it needs to create the impression that the USD is king. Therefore these rate hikes could be taken as a sign that the US does not want to remove the sanctions against Russia. If the rhetoric keeps increasing as we approach the fall, then it means that even if there is some truce between Russia and Europe, some sort of nonsense will be created to draw China into the Tussle

[LoriPrecisely]

It ended after hours with the earnings release for AAPL and AMZN. One of our plays popped big time also. I would have closed but my alert doesn't notify after hours. Will pay closer attention but expect the a.m. will provide ample opportunity for the sale.

A lot of stocks jumped after hours.
I sold a call on Amzn for 125. that expires today. The price stayed below that all week, closing Thursday at 122. I thought I was safe until I saw the after hours jump. I will likely lose my AMZN shares today. (there is no crying emoji) The premium to buy back is too much to make it worth it. I will be watching this all day. Maybe I will buy GOOGL instead.

[SOL]

It ended after hours with the earnings release for AAPL and AMZN. One of our plays popped big time also. I would have closed but my alert doesn't notify after hours. Will pay closer attention but expect the a.m. will provide ample opportunity for the sale.

A lot of stocks jumped after hours.
I sold a call on Amzn for 125. that expires today. The price stayed below that all week, closing Thursday at 122. I thought I was safe until I saw the after hours jump. I will likely lose my AMZN shares today. (there is no crying emoji) The premium to buy back is too much to make it worth it. I will be watching this all day. Maybe I will buy GOOGL instead.

You will get another chance, the markets should experience another minor top sometime in August, so a lot of companies will let out some steam before rallying higher. If you made money you lost nothing but gained valuable experience

[Yodean]

A lot of stocks jumped after hours.
I sold a call on Amzn for 125. that expires today. The price stayed below that all week, closing Thursday at 122. I thought I was safe until I saw the after hours jump. I will likely lose my AMZN shares today. (there is no crying emoji) The premium to buy back is too much to make it worth it. I will be watching this all day. Maybe I will buy GOOGL instead.

You could take a portion of the proceeds from the AMZN shares being called away, and buy a LEAPs, for every 100 shares called away, expiry 1 to 2 years, with strike just below market, or at the 1st minor support level, if you're comfortable with technical analysis. You therefore will preserve the potential to capture further upside on AMZN without risking too much.

Never fear having shares called away ...

[SOL]

Never fear having shares called away ...

I would go one step, never fear anything. Fear is a useless emotion guaranteed to throw the brain into an illogical loop where illusions supported by delusions cement any silly idea generated

[LoriPrecisely]

Never fear having shares called away ...

I would go one step, never fear anything. Fear is a useless emotion guaranteed to throw the brain into an illogical loop where illusions supported by delusions cement any silly idea generated

Wow, that is an excellent proverb. I will commit it to memory so I can share it with others.

[Yodean]

I would go one step, never fear anything. Fear is a useless emotion guaranteed to throw the brain into an illogical loop where illusions supported by delusions cement any silly idea generated

I embrace Ms. Fear as a friend, as a signal, even as a part-time lover ... at times she calls me into appropriate action, at other times warns me re/ the % of certain outcomes. Ms. Fear also pumps me up with energy, which I can then alchemize into excitement.

The human body cannot distinguish between Ms. Fear and Ms. Excitement on a physiological basis - the mind creates stories to do that, filters.

Repressing Ms. Fear without allowing her to speak calmly at times will likely lead to her screaming and yelling at some point.

Some minor, personal examples of Ms. Fear:

-friends, associates, relatives suffering jab-induced injuries/deaths;
-gaining excess weight;
-losing my ANP (Alien Ninjedi Powers);
-not doing my best, most of the time, with what is available to me;
-losing to my wife in ping pong;

Embrace and use Ms. Fear to your advantage. She can be a friend with benefits, like Ms. Death (Ms. Fear's older sister).

[Yodean]

Would anything invalidate the scenario?

Indeed, this is a high quality question.

I forget to ask myself this often enough, but I keep trying to remember to do it more often, particularly when I have a certain thesis about a trade or investment for which I have "strong conviction."

What could invalidate my thesis and turn the trade into a bloody mess?

Then I try to come up with specific % of those events coming to pass.

But mostly, I just press the "buy" button.

Need to ask myself more often the "invalidation" questions.

[harryg]

I would go one step, never fear anything. Fear is a useless emotion guaranteed to throw the brain into an illogical loop where illusions supported by delusions cement any silly idea generated

Easy for you to say.

15 years ago I threw a boomerang and it didn't come back. I'm afraid to leave the house now.

[harryg]

Would anything invalidate the scenario?

Indeed, this is a high quality question.

I forget to ask myself this often enough, but I keep trying to remember to do it more often, particularly when I have a certain thesis about a trade or investment for which I have "strong conviction."

What could invalidate my thesis and turn the trade into a bloody mess?

Then I try to come up with specific % of those events coming to pass.

But mostly, I just press the "buy" button.

Need to ask myself more often the "invalidation" questions.

This thinking is a type of stop loss really. Not supposed to prevent action, just let you know if things aren't going how you originally hoped. Always better in my view to decide that in advance, otherwise you might end up "cheating".