Is The Stock Market Crashing: All Bark With No Bite

is the stock market crashing

Is The Stock Market Crashing

This is a video article of the article titled  Stock Market Crash 2017-reality or all Hype; a small excerpt of this article is provided below.

The crowd appeared to embrace this market initially, but just as fast as they embraced it, they pulled back as illustrated by one of our proprietary indicators. In Jan of this year, the gauge was in the middle of the Mild Zone, but as you can see as of the last reading, the gauge has just dipped into the “severe” zone.  Given the current trajectory, we expect the needle to move deeply into the “severe” area in the very near future.  

Instead of pulling back the markets have continued to trend higher, and at this stage of the game, patience is called for. Ideally, the markets will let out a large dose of steam, but markets do not usually cater to your needs; barring a substantial pullback a nice consolidation would suffice. Market consolidations drive key technical indicators into the oversold ranges and allow the market to build up steam for the next upward leg.

Is The Stock Market Crashing: May 2019 Update

In the last update the neutral readings came in at 42, prior to that it was 37, and the one before that came in at 41.00, and you can go back all the way to Jan of this year to see that after bottoming out at 18 (Jan 1, 2019 update), the readings have steadily risen. However, in that same update (Jan 1, 2019), the bearish readings came in at 53, since then it appears that individuals from the bullish and bearish camps have been migrating over to the neutral camp.

The unexpected factor is that no one would have expected this to occur in a rising market.   In the 1st week of  Jan, the Dow was trading in the 23,000 ranges after having dropped below 21,500 towards the end of Dec 2018. For the record, those holding out for a “crash-like scenario” might be sorely disappointed, as crashes occur when the masses least expect.  The sharp pullback in Dec 2018 was something most did not expect as the markets had already pulled back from Oct to Nov 2018 and the follow-through caught many with their pants down. Now everyone is expecting a strong move and what they might get is a minor pullback.

Stock Market Crash Update  June 2019

Those that hold out for a meaningful correction might be sorely disappointed as on the monthly charts, the Dow is trading in the extremely oversold ranges, and this could limit the downside action. Individuals that use the term significant or sharp when referring to a correction who are not familiar with the concept of Mass Psychology, usually have floating targets. For example, before the correction starts, they might be satisfied if the Dow sheds 1500-2000 points, but after the masses are in full-blown panic mode, these guys will jump on the panic train and lower their targets. History illustrates that they will keep lowering the targets until the markets suddenly reverse course, catching them off guard once again. The crowd never wins, and that’s one of the main lessons investors need to understand when it comes to investing.

The favoured downside target would fall in the 25,400-25,550 ranges. As V readings are extremely high, there is always the potential for an overshoot as shown in the above chart. Unless the trend reverses (and there is no sign of this) all pullbacks should be embraced; the stronger the deviation from the norm the better the opportunity. Market Update April 23, 2019

Ideally, the markets let out a nice dose of steam, but if they don’t that, that is fine too.  We would be happy also if the markets hardly let out any steam, but negative sentiment spiked and our indicators pulled back from the overbought ranges.  We focus on sentiment, and after we have identified what emotion is driving the markets, we move over to Technical analysis to help fine-tune entry points.   As we have stated on several occasions, pullbacks should be embraced and the stronger the deviation, the better the opportunity.

 

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