are we in a bear market
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stock market bloodbath - stock market bloodbath profits guide
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| stock market bloodbath - stock market bloodbath profits guide |
Here is a chart of the S&P 500 daily chart. OUCH! You can see it has formed some sort of an elongated wedge pattern so far. [chart below]
Its been a stock market bloodbath lately. But without realizing it, you could be sitting on a winning lottery ticket. Yes, its true.
The stock market’s bloodbath Friday was not the final flush needed to clear the way for a recovery, according to a widely-watched indicator of selling intensity.
Many technicians, as well as old-school fundamental investors like Warren Buffett, say that the time to start buying in a falling market is after signs of panic, or capitulation by the bulls. Well, if you are not seeing panic right now, we do not know what is.
But after the Dow Jones Industrial Average DJIA, -2.39% plunged 391 points, or 2.4% on Friday--the biggest one-day percentage decline in 3 1/2 months--the New York Stock Exchange’s
The A50R Chart, which represents a value of overbought and oversold areas on the stock market, is clearly pointing to the market being very very CHEAP HERE. See the chart below. Currently as you read this post, we are sitting at 12.40. Its an area seen as been very very low. Normally we do not see these levels for too long.
Does it mean the market CANNOT experience more selling. No!, that is not what we are talking about as lots of investors are panicking right now, and every bad bit of news coming out of china is causing some people to 'shit the bed pan' the last few weeks.
In other words, sellers tend to hit the sell button a little harder when the market is falling, then when it isn’t.
As an indicator the A50R indicator could be telling us that a big bounce could be coming to the stock market later in the year. And it could be one of those bounces that goes up 100 - 200 points rather fast. So you better be ready if that actually does happen.
Also On Friday, the NYSE’s Arms rose to just 1.791. That is a better sneak peek at what the market will actually do in the short term. You can get the latest chart in our LIVE VIP NEWSLETTER CLICK HERE!
In all my years, I actually cannot remember the market falling this hard after XMAS, or 2 weeks after the new year! It is terrible, and its wiped literally billions off the value of investments. I can recall several other times, the market GOT A SWOOP down early in the year, only to come back by the end of the year.
Its probably a bit melodramatic to start predicting what is going to happen in DECEMBER 2016 here in JANUARY. Yes, lets not be pre-emptive, but so far this does feel a little bit different to 2008. Of course there are lots of brokers, and even main stream media telling you to get on the phone and SELL, SELL, SELL, almost everything. However looking back in recent history after big drops like that, early in the year that would be a big big mistake.
Are investors in a state of PANIC! The quick answer to that would be a big FAT NO!, but are they really scared, well sure. When every you see significant sell offs in the market, it normally leads to other people who are heavily invested, to start a domino effect, and do what other people who are heavily invested in the market do.
But when there is a bloodbath, or semi-bloodbath in the market, do the smarter investors start selling. No, what they do is see opportunity where other people are screaming FIRE! and heading for the exit doors.
One of the smartest investors in the world, by the name of WARREN BUFFET was once quoted as saying. "buy when people are panicking, and sell when people get very very greedy" Its a good rule to go buy, and its one of his top strategies he has incorporated through bear markets, and bull markets to formulate HUGE FORTUNES.
I cover more and more technical analysis ==> HERE in our VIP members section.
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