Cortopassi wrote: ↑Tue Apr 07, 2020 8:08 am
The market is nuts. It is not a forward indicator, unless by forward you mean two seconds into the future.
I don't know what to make of this.
Half of me says CV overblown, we will get back to normal sooner than expected.
Half says the opposite..
Either way, the economy has been destroyed for many months/years and two 1000+ points days of rallies seems wayyy too hopeful. I'd almost do a mathjak daytrading thing later today if it is still up and buy some SDOW.
Technically speaking, if you're going to short this is the level to do it at. ~2800 is kind of the line in the sand as I see it. There are so many resistance lines around there, from past hard resistance levels, Fibonacci retracement levels, the 2009-Feb 2020 bull market trend line, and even the first leg down of this correction which bounced at 2850. If we break and hold above that 2800 range I could no longer say that the evidence is in favor of us being in a bear market. The short and long term signals would all be bullishly aligned. So, if there is going to be another leg down and we really are going to have a true bear market... it needs to happen real soon.
This is either the ultimate bull trap that is going to leave the bulls broken and bloody, or it's a new bull market. I still think fundamentally it's too soon to start a new bull market. I think we need at least a couple of more months of pain, and one more leg down before we can finally bottom and start a real (slower and lower volatility) new uptrend. But even I am starting to question my short term bearishness. But that's exactly what a bear market rally is supposed to do. It needs to keep the bears and the bulls honest... and the only way it can do that is to be good enough to make the bears question their bearishness, and to give the bulls full conviction that they are right. Bear markets however usually bottom on a whimper not on a bang. Like I mentioned last week, in 2008 the market bottomed with the VIX at 17. I have a hard time believing we bottomed with the VIX at 85. I'm watching very closely, the next week will be really telling, I'll either be selling more stock hoping to buy back around that 1900-2100 level I've been eyeing for weeks now, or I'm going to have to admit I'm wrong (or at least early, which is basically wrong with an asterisk), buy back in, and keep a tight stop loss in case of a whipsaw.
I *think* that the problem we are facing is that the money is following the trend in virus numbers right now, and has not begun to really look at the economic ramifications. Long term, I'm as bullish as they come. I still think the stock market will be mostly recovered by the election... but even I have to admit this seems way too soon and way too little pain for a bear market. Even 1987 floundered sideways for a couple months and retested the lows before it started moving back up again. A 6 week bear market just makes no sense.