Worst 25 year period in stocks? Perish Or Flourish

worst 25 year period in stocks

Is It The Worst 25-year period in stocks?

Dec 2022

No, it’s not the worst 25-year period in stocks; it’s actually worse. Think almost 50 years, which means a tremendous opportunity is relatively close. Don’t mistake close at hand for around the corner. There will be one strong head fake and a final selling climax wave.

Bullish sentiment is still well below its historical average of 39; the current reading is 24. Fund managers and most financial professionals focus on the recession factor. Too late, the markets are forward-looking and have already factored in all these developments. Hence, the rally after the disappointing GDP data and the Fed raising rates again.

s&p500

Contrarian Perspective on the Worst 25-year period in stocks

This is a positive development from a contrarian angle, confirming that the masses will react incorrectly. They Zag when they should zig and jump out of the window when they should be taking a siesta. Now we are in rally mode, so aggressive traders can use strong pullbacks in the Dow (ranging in the 300 to 600 ranges to add to their long positions. The markets are expected to top in October; one should not confuse topping out with an immediate plunge. Markets seldom crash immediately after putting in a top; they go through a topping process.

global profit optimism

If you plot that chart against the Dow or SPX, you will notice that extreme moves correspond with market bottoms. However, one must remember that while history repeats itself, it never takes the same path. We suspect their pessimism levels would have to dip below the 2008 lows, confirming that another potentially more severe downward leg should follow the current market bounce.

A Secondary and more potent buy signal has been triggered. However, a new buy signal on the longer timelines is almost always accompanied by a minor sell signal in the short term.

The SP500 could test the 3870-3900 ranges, and, barring a black swan event, this would represent another buying opportunity. After that, it is projected to blast through resistance in the 4130 to 4150 ranges, which will/should trigger a robust rally. It will likely test the 4500 to 4600 ranges before topping out. Market update July 24, 2022

Corrective phase

The markets are entering a corrective phase; the SPX has hit short-term targets. Former support points turned into resistance which should turn into zones of support again, albeit on a short-term basis. The likely pullback targets fall in the 3960 to 4020 with a decent chance of overshooting as low as 3870.

We are now at the Push stage; the market usually runs into some resistance here. The market will release steam and trend sideways for 3 to 9 trading days. Market update July 24, 2022

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

The markets have now made it slightly past the PUSH stage, but resistance is expected; they should consolidate over the next several days. This short-term pullback will give the markets the force necessary to break out towards the Thrust phase. Resistance from mild to medium will be encountered as each stage is breached. We are now close to hitting the fast and furious point, which should last until the end of the thrust zone.

anxiety index

Conclusion

It’s not the worst 25-year period in stocks, but worse, as we stated earlier. As the equation must always balance, this volatile and painful period will follow a long bullish phase. The markets still need to undergo one more selling wave (probably set to occur around Oct 2022), but once that is done, it will lay the groundwork for a stellar bull. We have codenamed this cybernetic bull as it will be the most muscular bull ever.

While bullish sentiment has risen, it is still trading well below its historical average of 39.00. Experts and the masses remain nervous; the path of least resistance is up until September-October.

 

 

Empowering Ideas: Thought-Provoking Reads

Benefits of Investing Early: Building Wealth and Achieving Peace of Mind

Benefits of Investing Early: Wealth and Serenity

Benefits of Investing Early: Building Wealth and Achieving Peace of Mind  Introduction: The Transformative Power of Investing Early Investing early ...
The Marvels of Contrarian Thinking

Contrarian Thinking: The Power of Challenging the Status Quo

Success Uncorked: The Marvels of Contrarian Thinking June 15, 2024 Prepare to embark on an exhilarating journey into the realm ...
Black Monday 1987 Cause: Stupidity and Greed

Black Monday 1987 Cause: Stupidity and Greed

Black Monday 1987 Cause: Lessons in Stupidity and Greed June 15, 2024  Introduction: The Perfect Storm of Folly and Excess ...
Stock Market Predictions Today: Americans Fear The Market

Stock Market Predictions Today: Ignore the Noise, Follow the Trend

Stock Market Predictions Today: Rubbish, Focus on the Trend as that is all that matters June 15, 2024 In the ...
Share Market Fear and Greed Index: Ignore It, Focus on the Trend

Share Market Fear and Greed Index: Ignore It, Focus on the Trend

Share Market Fear and Greed Index: Ignore It, Focus on the Trend June 15, 2024 In the ever-evolving financial markets, ...
Outwit Mob Psychology

Mob Psychology: Breaking Free to Secure Financial Success

Outwit Mob Psychology: A Guide to Stock Market Investment Success Update June 12, 2024 Kindly ensure you have perused this ...
Why is Inflation Bad for an Economy: Enriching the Few, Hurting the Many

Why is Inflation Bad for an Economy: Enriching the Few, Hurting the Many

Why is Inflation Bad for an Economy? Feeding the Rich at the Expense of the Poor June 12, 2024 The ...
What to Do When the Stock Market Drops: Buy Big

What to Do When the Stock Market Drops: Back the Truck Up and Buy

What to Do When the Stock Market Drops: Buy Big June 11, 2024  Introduction: Embracing Market Crashes with a Contrarian ...
Stock Market Timing Strategies: Mastering Patience and Discipline!

Stock Market Timing Strategies: Patience and Discipline Required

Stock Market Timing Strategies: Mastering Patience and Discipline! June  9, 2024 Introduction: In the ever-evolving world of financial markets, pursuing ...
Small Dogs Of the Dow

Unleashing the Power of Small Dogs Of the Dow

Small But Mighty: Unveiling the Power of Small Dow Dogs Updated June 08, 2024 In the intricate world of stock ...
Dow Jones Forecast: Wild Swings and Market Surprises Ahead

Dow Jones Forecast: Navigating the Ups and Downs

 Dow Jones Forecast: Navigating the Waves of Opportunity June 7, 2024 In the treacherous waters of the financial markets, where ...
Best Time To Buy Stocks is when people panic

Best Time To Buy Stocks: Embrace Panic & Seize Opportunity

Best Time To Buy Stocks: Corrections Create Opportunities Updated June 02, 2024 The best time to buy stocks is when ...
Common Sense Investing Book: Ironically, It Isn't So Common

Common Sense Investing Book: Ironically, It Isn’t So Common

Common Sense Investing Book: Why Common Sense is Surprisingly Rare June 2, 2024 A Journey Through the Labyrinth of Financial ...
Stock Market Long Term Trends Success equates To Discipline

Stock Market Long Term Trends Success equates To Discipline

Stock Market Long-Term Trends: Success Equates to Discipline Updated June 01, 2024 Navigating the stock market is akin to sailing ...
Navigating the Stock Market Forecast Next 6 Months: Strategies for Success

Analyzing Trends: Stock Market Forecast for the Next 6 Months

Stock Market Forecast Next 6 Months: Analyzing Trends and Predictions Updated May 31, 2024 As we consider the stock market ...

Geopolitical Risk Unleashed: The Gritty Reality