Stock Market Crash Date: All Bark & No Bite
Updated April 202
Experts are notorious for issuing dates and dire predictions, but on both counts, if one bothers to track their performance, one will find that monkeys with darts fare much better.
We stated this to our subscribers on the 11th of July 2019.
Looking at the chart below, it would be easy to conclude that we are about to push the “triple top” theory, but we are not. We are looking at the picture in terms of extreme resistance and extreme support zones. The Dow has tried to trade above the 26,800-27,000 range for almost 19 months. Furthermore, these attacks have been widely spaced out. Hence, the Dow is now at an inflexion point”; it either blasts above 27,000 and, in doing so, former resistance turns into solid support.
Forget the Stock Market Crash Date Argument; Focus on the Trend Instead
Alternatively, if it fails to hold above 27K (after trading above it), the pullback could range from medium to vigorous. A medium pullback would end in the 25,500-25,800 range. A strong pullback could take the Dow all the way down to 24,5K (plus or minus 200 points).
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This outlook is based on the short to intermediate timelines; the long-term picture is still bullish. We are not worried about a sharp or medium pullback, for the only thing that changes is the opportunity factor. When the trend is up, strong deviations are viewed through a very bullish lens; in other words, the strong the deviation, the better the opportunity factor. If the above comes to pass, it will be a good time to test your resolve, for it is easy to buy when the situation appears to be calm, but when it’s not, most panic and run instead of embracing the opportunity. It’s amazing how when a market is soaring, everyone wants to get in and pay more and more, but the same individuals willing to pay more are now afraid to pay less for the same stock. End of Market Update, July 11, 2019
Market Sentiment is far from bullish.
Look at the gauges below, and it immediately becomes evident that the only ones that are scared are the ones that historically fare the worst. Anyone with a mass mindset falls under that category. In other words, lemmings will always be lemmings, and their only function in the markets is to be used as cannon fodder.
The long-term outlook for the Dow and the overall markets remains unchanged. On the monthly charts, the Dow is still trading in the oversold ranges, so this current pullback must be viewed through a bullish lens despite the gnashing of teeth. The only area of focus, therefore, should be directed at finding the best stocks to get into, as stocks are not created equal. For example, value investing is almost dead, as hot money is chasing momentum-based stocks. If you get into a momentum-based stock at the wrong time, despite solid fundamentals, you could be on the receiving end of the stick.
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Stock market Update April 2020
Every bull market experiences at least one backbreaking correction that is falsely mistaken for a market crash, and the coronavirus crash is this bull market’s harrowing moment.
Don’t forget to keep a trading journal; the best time to take notes is when blood is flowing freely on the streets.
The 1987 crash and 2008 crash proved to buy opportunities once in a lifetime, and we could get a setup that could blow these setups and create the “father of all opportunities“. Such an event is so rare that it might occur only once during an individual’s lifetime.
Roughly four weeks ago, the masses would have begged for such prices, but 28 days later, they have thrown the towel in and are fleeing for the hills. The volatility is likely to continue until the end of the month, especially since V readings soared by a whopping 650 points to an all-time high.
When the panic subsides, it will create a feeding frenzy of the likes we have never seen before. Combining zero rates, and two trillion dollars injected by the Feds into this market with no end in sight, the markets will be driven to unimaginable heights by today’s standards 18 months from today.
References
The Crowd: A Study of the Popular Mind: Gustave Le Bon: http://www.gutenberg.org/ebooks/445
Five warning signs of market euphoria: Investopedia: https://cutt.ly/rslGnYU
Impact of Mass Media Use on Youth: NCBI Resources: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2792691/
Homerun definition: The free dictionary: https://financial-dictionary.thefreedictionary.com/home+run
The pros and cons of mass media: Waldern University: https://bit.ly/2Egoq65
Why people lose money in the markets: The Balance: https://cutt.ly/rslG1eK
Prepare for massive stock market opportunities: Market Watch: https://on.mktw.net/32QvqB4
What is mass hysteria: Medical News Today: https://www.medicalnewstoday.com/articles/322607
Any Monkey can beat the Market: Forbes: https://www.forbes.com/sites/rickferri/2012/12/20/any-monkey-can-beat-the-market/
