Bear Cave 2 (Bull Allowed)

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SPY daily: Did we just see a daily cycle low? The test of the 10 dma be coming up next.

Daily Cycle Low
Posted on May 13, 2021

Did stocks print their daily cycle low on Wednesday?

Stocks printed their lowest point on Wednesday, day 48. That places stocks in their timing band for a daily cycle low. The daily cycle decline was stopped at support from the 50 day MA. And with stocks currently being in a daily uptrend, if stocks form a swing low above the upper daily cycle band then that will indicate that stocks will remain in their daily uptrend and trigger a cycle band buy signal. A break above 4134.73 will for a daily swing low. Then a close back above the 10 day MA will have us label day 48 as the DCL.
https://likesmoneycycletrading.wordpress.com/author/likesmoneystudies/
 

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Another "swift correction"? It seemed like a few days ago the world was ending.

S/T S&P 500 is knocking on the 61.8% retracement level at 4168. A push past that will challenge new highs. I think we'll see 4,300 by June.
 
Bullitt said:
Another "swift correction"? It seemed like a few days ago the world was ending.

S/T S&P 500 is knocking on the 61.8% retracement level at 4168. A push past that will challenge new highs. I think we'll see 4,300 by June.
Click to expand...

A possible daily cycle low is in play here.... Looking good as the SPX is now moving above the 10 dma. Still a possible dead cat bounce, but looks good right now! You have to trade what is happening and not what you think will happen..... Looks like a buy signal be coming and the start of a new daily cycle for those that trade using that data. You know how I roll.... I will wait a tad more...... Those that held their positions are happy as they got back most of their loses so far, and Easy Money Monday is up next. Last Monday was not so easy. I made some nice beer money trading VXX. I don't recommend that folks try and trade VXX!!!!! EVER! It is not easy to trade, but I have a system for trading it that has pretty good odds for a winning trade. (It's Gambling for Sure with NO FREE drinks)
https://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=6&dy=0&id=p07802663974&a=946378452
 

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Robo,

what is the general investment strategy in a bear market for TSP investing?
I know - without giving investment advice right? just trying to educate myself on the picture of how that would work. is it as simple as waiting on the sidelines till the market would turn back from bear to bull. or is there a more active approach?
 
mmk,

I'm not an investor, but if I was I would use the weekly 10 wma. I trade using the daily, and that might be for you too if you have the time. I think Tom has a really good service as others here do for investing with limited moves. As for investing in a Bear Market.... cash is King!

Some thoughts on trend trading.....
https://www.fibtimer.com/about/prior_commentaries.asp

I'm not recommending Fibtimer's service, but his reports give you an idea of how trend traders trade. I also use cycles and look for extremes and cycle lows to trade.

The bottom line for me is I trade what is happening and not what I think will happen. I don't try and pick tops or bottoms. I'm using the 5, 10, 20, and 50 dma for MT trading. The 20 dma/50 dma would be more for an investor using TSP. I use the 5, and 10 dma and cycle data for ST trading. Read Fib's reports, and back test using my daily chart below and see where you would have bought and sold. Keep in mind trend trading doesn't work very well in a Bear Market. I have unlimited moves in my Vanguard account so I can move in and out of indexes as often as I want during the trading day based on my sell and buy signals. AND YES..... I get whipsawed sometimes, but I can sell quickly if I have to. That is not so easy using TSP. One should have a Roth IRA at Vanguard using a brokerage account in my opinion, and not just TSP. That is one of the best pieces of advice I gave myself over the years. Once the Bear starts and investor BTFD to soon things will change. At some point the Fed will no longer be able to keep the market moving higher. History proves that.....

Like I said, in a Bear Market cash is king as you wait for the next extreme to trade.

Bottom Line: There is NO SUCH thing as a perfect system, but trend trading works well for me in the current market. That will change once the next bear starts. Like I said, Tom as a good system as do others here for investing in TSP. The more important thing most have to learn is Risk Management. Wait to buy or add during extremes and most have a very hard time doing that.

A small comment from Kaplan.

We are likely to get compelling bargains later in 2021 which could gain substantially within one year.

May 14, 2021: Wait patiently for bargains.

Most investors are far too heavily invested early in a bear market, thereby not only causing them to lose money into frequent severe pullbacks but also to have insufficient cash to capitalize upon worthwhile bargains when they are created. I expect numerous compelling purchase opportunities before the end of the year with many of them occurring this summer. Raise cash now to be able to take full advantage of chances to buy shares which in some cases could double or more within about one year or less. If you made this mistake during the first quarter of 2020 then be better prepared this year.

Kaplan
https://truecontrarian-sjk.blogspot.com/


I hope this will give you some ideas to think over for investing using a MT trading system. I'm a trader NOT AN INVESTOR Brother!
 

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mmk119 said:
what is the general investment strategy in a bear market for TSP investing?
I know - without giving investment advice right? just trying to educate myself on the picture of how that would work. is it as simple as waiting on the sidelines till the market would turn back from bear to bull. or is there a more active approach?
Click to expand...

Now that bear markets last only a couple of weeks (March 2020), there's not much to do. :)

But in a normal bear market, rallies can be explosive, but they eventually fail and rollover. Those rallies do tend to come from much lower than you'd expect them to, meaning the declines can really hurt. So in general, rather than buying the dips, a market timer would sell the rallies.
 
Got Bitcoin?

SentimenTrader
@sentimentrader
·
49m
In the past 7 sessions, stocks have suffered 3 of the largest bouts of concentrated selling pressure in history.

May 11: Largest all-time
Today: 5th-largest
May 12: 19th-largest
https://twitter.com/sentimentrader
 

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How many bitcoin millionaires are no longer millionaires? It's always been a beer trade for me brother. If I win in a few years I'll be able to upgrade to a case of Sam Adams Cherry Wheat. If not, I'm out a case of Keystone Light.

I almost replied to Jason's tweet asking for more context. He says, "largest concentrated selling pressure in history" yet the chart only goes back 16 months.

I still think Bill Hwang was running up ARKK and all the garbage inside that ETF. It is a bit suspicious how ARKK has underperformed since the attempted cornering of VIAC, TEN, DISCA and a few Chinese ADR's and lends credence to the cloaked levels of leverage in markets today.
 
I’m still a sub with Jason, and I will check it out later today.

SPY back in a downtrend. Trend trading is not looking good going into the summer months using the 10 dma and 20 dma. I might have to go back to trading using only the 2 hour chart. I like to trade both ways in a market like this one. Buyers already moved the SPX price back above the 50 dma.
 
Stocks Haven't Done This for More Than 6 Months
Jason Goepfert
Published: 2021-05-20 at 07:35:00 CDT

The bears tried. They failed but seem to be making another run today.

After letting some air out of Tech stocks and some former highfliers, bulls have made a stand and kept the broader market steady. Once again, sellers failed to push the S&P 500 down even 5% from its peak. It got close last week but held above that threshold.

https://www.sentimentrader.com/blog/stocks-havent-done-this-for-more-than-6-months/
 
SPX daily: Bulls working on taking back the 20 dma..... (CT = counter trend rally) One would think we shall see a push up at the close...... Doing some ST trading and taking a Beer Money trade using SDS as I wait for a confirmed long signal. Lots of reasons why one should not to buy yet, but I will take the signal when it comes and keep it small. This is a very weak rally as SS points out below.

https://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=5&dy=0&id=p27513054717&a=947889939
SevenSentinels
@SevenSentinels

14m
2:15 PM

C/T Rally Continues

SevenSentinels
@SevenSentinels

3h
11 AM

Markets Rebound On Weak Breadth
https://twitter.com/SevenSentinels?ref_src=twsrc^google|twcamp^serp|twgr^author
 

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SPX daily: The cycle dudes like the move above the 10 dma, as do I. However, I will wait to see a confirmed trend taking place before I go long again..... Yes, I track and use cycles, but NEVER make a trade based on only the cycle.

The 5/22/21 Weekend Report Preview
Posted on May 22, 2021

Stocks lost the 10 day MA on Monday then backtested the 50 day MA on Wednesday, forming a double bottom.
Stocks formed a swing low on Thursday. Stocks went on to close a full candle body above the 10 day MA on Friday to indicate that day 48 was the DCL. Stocks are in a daily uptrend. Closing above the upper daily cycle band indicates that stocks will remain in their daily uptrend. A close above the 4200 resistance level should lead to a trending move.
https://likesmoneycycletrading.wordpress.com/2021/05/22/the-5-22-21-weekend-report-preview/
 

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SPX daily: My daily cycle chart. I ST trade long and short based on the 5 and 10 dma's, but I have to see a confirmed trend taking place above the 20 dma before placing MT positions, and then I still use stops. The BTFD after tagging the 50 dma, remains in play until it's not. We shall see how next week plays out.
 

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Be Prepared for Some Turbulence
Jeff Clark | May 24, 2021 | Market Minute | 2 min read
The dollar is setting up for a short-term bounce.

That won’t change the longer-term trajectory for the buck… Which is clearly bearish.

But, if you’re trading assets that tend to run counter to the dollar – like gold, silver, and most commodities – then be prepared for some short-term turbulence…

The dollar has fallen more than 3% over the past two months. That may not seem like much in an environment in which “meme stocks” move 20% in a day, and cryptocurrencies can rise and fall 50% in a week.

But, it’s an enormous move for a currency – especially for the world’s reserve currency.

And, that action has set the dollar up for an oversold bounce.

Take a look at this chart of the U.S. Dollar Index (USD)…
https://www.jeffclarktrader.com/market-minute/be-prepared-for-some-turbulence/
 

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