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Stock Market Correction or Buying Opportunity?


Pitcher
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Stock Market Correction or Buying Opportunity?

 

I know most of you have money in retirement accounts and you don't trade them, which is the right thing to do.  For those who have open positions and trade stocks, please be aware of what is going on in the Stock Market.  While I don't want to be a doom and gloom guy or an alarmist, I would like to share my thoughts on the markets based mostly on technical analysis and years of trading experience. 

I am a Technical trader, or someone who relies on chart support and resistance  levels along with moving averages to make my trades.  Here is what I am seeing on the Charts.  

Below is my Daily chart for the S&P 500.  

 

On the chart below the high of the S&P was 2872, reached on 1-26-18   

On 2/2/18 we broke support and the 20 Moving Average.  (green line)

On 2/3/18 we broke the 50 MA (red line)

Next we  broke the 100 MA (white dotted line) and tagged the 200 MA.  Once we hit the 200 ma we had a capitulation and the price bounced back up. The low was 2532 on 2/9/18

For the past month and a half we have been stuck in a trading range but today we barely broke a key support level and closed below the 100 MA.  Not good!!!

 

I've been saying for some time I thought we would test the low of 2/9/18 at 2532.  At that point I was hoping for what they call a double bottom (and a up we go).  Now with all the news

of interest rate hikes and tariffs I'm thinking we blow the 200 MA and go a lot lower.  What to look for in the coming days.

 

A bounce off the 200 MA, the double bottom retest ( All clear, up we go) or, 

A break of the 200 MA, and then the 50 MA crosses the 100 MA and the 200 MA.  If that happens that is called the Death Cross and we will probably go into correction mode.

(Possibly a 20-35% off the 1/26/18 highs).

 

Do your own Due Diligence and consult your Broker or Financial Consultant if you are worried. I am giving you my observations not to go sell everything but to make you aware that we are possibly in the beginning stages of a changing market.  Like I said earlier most of you are buy and hold investors and over the long term based on years of data you should be fine.  I'm older and can't afford another 45-50% haircut to my funds.  I manage my own funds and have years of experience so when I sense a trend change I start trimming my long term investments.  

 

With every correction or sell off there is great opportunity.  We may be getting one of those opportunities soon.  (sorry for using that word but it works in this case).  If you are a trader start making your buy list of stocks now.  Stay with good earnings, best of breed stocks.  You might also stay in domestic stocks to reduce your exposure to possible tariff reprisals.  Good luck to all of you in your investing and watch the news.  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Edited by Pitcher
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Another bag day for the market. Down 1400 on the DJ-30 this week.

We tagged the 200 ma on the S&P 500. I expected that but didn’t think it would be so fast. 

Thats the way the market works these days when algorithms and computers take over. Late Friday sell off, 

 

Ok now what.  We are at the retest of the Feb 9th low. We are oversold and should get a small relief rally Monday or Tuesday.

After that rally it will depend on the news. Earnings won’t start again till mid April so keep an eye on what Trump and China do and say.

The new budget bill was pure trash and the market didn’t care for that too much either.

 

im having a very good week shorting Facebook and Navida.  As a trader I don’t care if we are going up or down, I can find good trades.

Sideways is my worst trading scenario, I hate sideways action

 

Stay tuned, we may just possibly be putting a Bull down like a Spanish Matador.

Keep an eye on the 50ma crossing down the 200 ma on the S&P.  If that happens, RUN!!!

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No problem. 

Disclosure I'm heavily into Covesting where beta is about to be released. They have a Crypto Intelligence portal where they aim to educate people on things crypto. TA is a serious part of that. Some traders are already contributing ideas and building followers.

The Covesting founders themselves all come out of Saxo Bank and stock trading backgrounds. 

I respectively suggest you check them out as ultimately  they will be a portal for all things Crypto done in a legal legitimate way. I'm sure you have something to offer there too.

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  • 1 month later...

@Pitcher

here are some returns from novice traders in 10 days on Covesting beta platform

100%. But even the results of what us novice traders are able to do is impressive. For the average person who has no idea about trading or crypto, 50% in 10 days is the best investment they’ve ever made in their life

 

IMG_20180430_064116.jpg

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I own some Bitcoin, Ethereum, and Ripple.  Not a large amount, just enough to keep an eye on it.  I like the charts and I believe they are headed higher.   Crypto currency is the future and it’s not going away.  When I see the government get behind it or regulate it I might be more inclined to really go all in.  We are in the 1st inning of this technology and it’s still got a ways to go before it becomes mainstream.  I’m mostly a stock trader and I know the rules of that game but I am very interested in crypto currency.  I appreciate everyone’s articles and enthusiasm.  

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