Hi! In my last post (#1260), I talked about what I see as a possible down turn. At the same time, no one knows the future. The trend can change at any time. I did want to note that while we continue downward since June, if looking at the one year daily closes chart, there is some reason to believe the market could continue upward.
Mainly the slope of the upper and lower Bollinger bands are upward, but the upper band on SPX looks to be forming a little bump....from just looking at charts over and over going back for years, when you see that it often results in a drop. Also, while Slow Stochastics are dropping, the prices causing those drops have not been as extreme. Maybe...just maybe the dip will not be that large and just move down to mid-point of BBs and then go up. That is my hope!
Then again...it has been many years since market has had a major drop. So...that is always something that I keep in mind. Going in 100% can be a big mistake if your in that deep when a big drop happens. I certainly hope that doesn't happen soon. So will be watching price and will attempt to set a stop point based on when I entered...it was a late high entry. Then again don't want to set that stop point so it triggers sell with a mild dip.
In the past, when I first started trying to time the market, and developed my first strategy ( involved observation during the 2013...which was a strong uptrend) i noticed that when Slow Stochastic drops down to or below 20, it often reflects a bottom although its not uncommon to experience a few days of upward Dead Cat Bounce before it drops further before going back up and Exceeding the drop. Getting in at that point was profitable as price rose into the 10 day EMA channel for 12-20 days or so before dropping down a bit and bollingers consolidating ..price meandering up and down before the Bollinger bands got constricted again...to begin the next leg. Somehow My strategy has changed over time and I am now trying to refocus on the basics.
Since we seem to be in a downtrend, that old methodology still may work but the entry point is really important as it always is. Fear normally causes me to delay entry...trying to be conservative I have waited for entry until closing prices caused the 10 day EMA to crossover the 20 day EMA on its way up. Why? Because looking back at many years of data indicates a strong likelihood that price will continue up and climb back into that magical 10 day EMA channel for a nice short rally. Obviously, this gets disrupted by news! But what can't be overlooked is Sentiment. Its a huge driver!! So I guess it is time for me to try to develop a better strategy building on that old strategy that takes the technical indicators and marries it with sentiment and news. Maybe use a more weighted approach. Will see....
Best wishes to all on your investments!!!!!!! :smile:
P.S. Remember I am not an expert by any means. Every person needs to do their own assessments and for every positive outlook there is a pessimistic outlook. No one knows what the market will do, but I am trying to learn its Tendencies, based on the indicators... Trying to stay Balanced!
I'm considering holding position looking for the Santa Rally; after that though some are predicting much lower lows.
WCPF Advanced Chart - (DJW) XX
