Stock market technical analysis

stock market technical analysis

Stock Market  Technical Analysis Unleashed: Separating Fact from Fiction

Updated Feb 2023

Stock market technical analysis on its own produces mediocre results. However, when combined with Mass psychology the results are outstanding. From a long-term perspective, this confirms that the super trend of polarisation, loss of personal freedom and massacre of the middle class will continue for roughly 30 years in the West. If we are lucky, it might end in 18 years, but we would not hold our breath, as the trend to elect super idiots into positions of power is in full swing.

 

The MACD crossover (on the weekly charts) is a bit more pronounced now, so unless there is a black swan event, the Dow is on course to (at minimum) test the 37,5K to 38K ranges. Between now and the 1st quarter of next year, we expect sudden surges in volatility. The short to intermediate trend won’t change if the Dow does not end the week below 38.8K.

We have a hypothesis regarding market tops. As the market matures and moves closer to putting in a top, the weekly charts have more influence than the monthly charts. When we are in the final stages of the topping game, the daily charts take over and exert more pressure than the weekly charts. At this point, the weekly charts are leading the game, and this pattern usually starts to manifest 3-6 months before a top is in. The count for the weekly charts began in September. It will be interesting to see if this hypothesis pans out.

bnb chart anxiety index

Our anxiety index is another development confirming that the markets will likely top in the 1st quarter of 2022. The gauge has moved precariously close to the moderate zone for the first time in almost two years. Even more, telling is the speed of this move; in less than ten days, it went from the border (almost) of the hysteria zone towards the perimeter of the Moderate zone.

 

Historical Sentiment values

stock market readings

For the first time this year, we have three back-to-back readings where bullish sentiment is trading above its historical average. The first strong confirmation that the markets are going to put in a multi-week top next year. Market Update Nov 11, 2021

As soon as volatility levels rose, bullish sentiment shed 12 points, signalling that a strong correction may be on the horizon next year. However, this correction is expected to be short in duration, as fear levels will likely spike into the next galaxy. Currently, the market has very few long-term investors, and most are fickle, quickly fleeing to the nearest exit when times get tough.

While many inflation experts have been urging the Fed to raise rates, they may soon be offering “mea culpa’s” and begging the Fed to step in. The Fed is likely to oblige, as “debase or die” may be their new slogan, with the masses, unfortunately, fulfilling the “dying” aspect of the saying. The Fed seems willing to do whatever it takes to achieve its goals, even if it means sacrificing everything in their path.

Conclusion

When combined with mass psychology, stock market technical analysis can yield above-average results. As we stated last year and this year, a lot of our proclamations are coming to pass, with the first part already unfolding. Once the MACD’s complete the bullish crossover, we expect a mini feeding frenzy that will ultimately pave the way for the next top. However, novice traders are likely to be caught off guard and “get clobbered,” as the saying goes.

Looking ahead, almost every asset class is expected to suffer next year, with the high-tech sector potentially experiencing bloody carnage if the projected pattern pans out. While certain stocks in this sector have refused to pull back, it’s likely that they will eventually do so, causing many “fake bulls and baby men” to learn a harsh lesson. It’s essential to remain vigilant, conduct thorough research, and make informed investment decisions to navigate these volatile market conditions successfully.

Bulls win some of the time, and bears win some of the time, but pigs always get slaughtered.

Tactical Investors Never Panic 

At T.I., we never panic. As Tactical Investors, we are the last to leave the room and the first to enter. We take our time to make informed investment decisions, leaving the running to the fools.

Over the next 45 to 60 months, volatility will become even more critical for traders and investors to understand. However, volatility will take on a whole new meaning starting next year. After the anticipated correction in 2022, we expect the markets to experience massive moves in both directions. While some moves may seem catastrophic, only the astute investor will recognize the opportunities masquerading as disasters.

In fact, we wouldn’t be surprised if, after 2022, the Dow routinely experiences round turn moves in the 7K to 12K ranges within 12 months. A round turn move refers to the move from the low to the high, such as shedding 5K points before ending the year 7000 points higher, resulting in a round turn move of 12K points. The key is to remain vigilant, stay calm, and be prepared to capitalize on the opportunities that arise during these turbulent times.

 

 

Other Articles of Interest

The Spy 200 Day Moving Average

The Spy 200 day moving average

The Spy 200 Day Moving Average: Understanding its Significance in Trading May 18, 2023  Are you an aspiring trader or ...
Read More
mob mentality

Mob Mentality: Understanding Its Power and Influence

 The Power and Influence of Mob Mentality May 17, 2023 Have you ever been sucked into a collective mentality that ...
Read More
Best investment chronicle

Market Mastery: The Best Investing Books for Your Success

Investing Intelligence: The Ultimate Guide to the Best Investing Books May17, 2023 I have frequently been asked about the top ...
Read More
Psychology of investing

Psychology of investing: Don’t Follow The Crowd

Psychology Of Investing: Follow The Trend Updated May 16, 2023 Repetition is the father of all sins, stupidity is the ...
Read More
Small Dogs Of the Dow

Unleashing the Power of Small Dogs Of the Dow

Small But Mighty: Investing in Small Dow Dogs May 15, 2023 Investing in the stock market often presents a challenging ...
Read More
Aroon oscillator

The Aroon Oscillator: Unlocking the Secrets of Market Trends

A Comprehensive Guide to Trading with Aroon Oscillator May 11, 2023 Are you looking for a powerful technical indicator that ...
Read More
market psychology books

The Ultimate Guide to Market Psychology Books

May 10, 2023 Do you want to learn how the stock market works in detail? Or do you want to ...
Read More
herd mentality

Herd Mentality: Understanding the Pros and Cons of Conformity

May 8, 2023 Herd mentality, also known as mob mentality or pack mentality, refers to the tendency of individuals to ...
Read More
market cycle psychology

Cracking Market Cycle Psychology: Navigating the Ups and Downs

Understanding the Market Cycle Psychology: Navigating Market Volatility May 4, 2023 The key concept in this text is market cycle ...
Read More
yen etf

The Yen ETF: A Screaming Buy for Long-Term Investors

Importance of Yen ETF in the financial market: May 03. 2023 This post provides an in-depth analysis of the Yen ...
Read More
What is Relative Strength in Investing

What is Relative Strength in Investing? A Beginner’s Guide

What is Relative Strength? Understanding the Basics April 30, 2023 Relative strength (RS) is a widely-used technical analysis tool essential ...
Read More
the rsi macd strategy

The RSI MACD Strategy: A Comprehensive Guide to Trading

Apr 29, 2023 Are you a trader looking for a reliable trading strategy? Do you want to increase your profitability ...
Read More
The Contrarian Outlook - Unleashing Success

The Contrarian Outlook: Unleashing Success

Apr 27, 2023 Introduction In a world where conformity and groupthink are often rewarded, having a Contrarian Outlook can be ...
Read More
MACD strategy

Mastering the MACD Strategy: A Powerful Tool for Investors

I. What, indeed, is the MACD strategy? Apr 26, 2023 Venturing into the realm of stock trading may prove challenging ...
Read More
How to Invest in ChatGPT

How to Invest in ChatGPT: A Beginner’s Guide

Intro: How to invest in ChatGPT April 25, 2023 In recent years, artificial intelligence has exploded, with the demand for ...
Read More
angry mob

Mastering the Market: Rise Above The Angry Mob Mentality: Secure Your Victory

Unveiling the Angry Mob: Dynamics of Collective Behavior Updated April 27, 2022 As described by social psychology, group or mob ...
Read More
Dow Jones Global Index: A Timeless Symphony of Global Markets

Mastering the Trading Game with the Global Dow Jones Index

Dow Jones Global Index: A Timeless Symphony of Global Markets Apr 19, 2023 The Dow Jones Global Index is an ...
Read More
Financial insights

Financial insights: The Inside Scoop

Financial Insights from the Cosmos Apr 18, 2023 Embracing Fear to Forge a Steady Path One might argue that the ...
Read More
nasdaq tqqq

Nasdaq TQQQ: Amplified Returns and Double-Edged Risks

Embracing the Nasdaq TQQQ: A Reflective Look at Risks & Rewards Apr 17, 2023 As George Orwell might have contemplated ...
Read More
The Patient Investor

The Patient Investor

The Patient Investor: Harnessing Mass Psychology for Success Apr 15, 2023 Embracing the Virtues of Patience and Discipline In the ...
Read More
Why Is Inflation Bad for the Economy?

Why Is Inflation Bad for the Economy? Demystifying the Menace

Why Is Inflation Bad for the Economy? Apr 14, 2023 Inflation is a complex economic phenomenon that is often difficult ...
Read More