According to Mr. Michael Oliver (www.olivermsa.com/): in bull market, when momentum structure touched monthly EMA36 the 4th time, it won't hold, it breaks through downward.
Evidence: 2003 - 2008, when momentum touched monthly EMA36 the 4th time, it started the year long crash.
Mr. Oliver gave another great example of the 1920 - 1929 US stock market, which you can check on his web site (www.olivermsa.com/).
For current market, we've touch monthly EMA36 the 4th time, it's highly possible that within next half to one year, we'll see very deep correction.
As Mr. Oliver said, 'don't assume it's gonna hold on the 4th time'.
Why 4, I don't know, I suspect there are human psychology involved. That deep down our heart, we all know this (bull) is NOT gonna lasts forever, and 4 just been the threshold which most people are willing to accept that the party is over.
The next big question should be: is there liquidity issue as we saw in 2008?
According Jeff Snider (alhambrapartners.com/), the root cause of 2008 GFC (the failing euro-dollar system) was never fixed, and what FED did just making the bubble gets bigger.
One hot spot to watch is if FED can holds the repo market. If there is liquidity issue, I think we can see the symptom there (e.g. run away repo rates).
The Asia stock markets are relatively calm, especially China. They think people are getting 'back to work', and economy will get back to 'normal' soon. Which worried me, I think when people all finally get back to work, only to find out the orders from their clients are been canceled. There are just NOT enough work for everyone. Economy globally are shutting down, demand decline is just beginning. The COVID-19 outbreak is devastating EU, and just at early stage on US. We are facing at least a recession ahead of us, while central banks are running out of monetary policy.
Overall, please be extreme careful about 'buying the dip'. In bear market, there is no bottom, only deeper.
PS: about momentum structure, I've made an indicator on trading view, just search 'momentum structure'. All credit goes to Mr. Michael Oliver.
PS: I've been warning for stock market since July last year (tw.tradingview.com/chart/SPX/Grw4tx8i/), and yes I've missed all the bull rally Q4. It's so hard to be a reasonable person on a crazy bull market... I made this post just to warn those who still think the bull can somehow, keep rally. Don't get hurt again.
Evidence: 2003 - 2008, when momentum touched monthly EMA36 the 4th time, it started the year long crash.
Mr. Oliver gave another great example of the 1920 - 1929 US stock market, which you can check on his web site (www.olivermsa.com/).
For current market, we've touch monthly EMA36 the 4th time, it's highly possible that within next half to one year, we'll see very deep correction.
As Mr. Oliver said, 'don't assume it's gonna hold on the 4th time'.
Why 4, I don't know, I suspect there are human psychology involved. That deep down our heart, we all know this (bull) is NOT gonna lasts forever, and 4 just been the threshold which most people are willing to accept that the party is over.
The next big question should be: is there liquidity issue as we saw in 2008?
According Jeff Snider (alhambrapartners.com/), the root cause of 2008 GFC (the failing euro-dollar system) was never fixed, and what FED did just making the bubble gets bigger.
One hot spot to watch is if FED can holds the repo market. If there is liquidity issue, I think we can see the symptom there (e.g. run away repo rates).
The Asia stock markets are relatively calm, especially China. They think people are getting 'back to work', and economy will get back to 'normal' soon. Which worried me, I think when people all finally get back to work, only to find out the orders from their clients are been canceled. There are just NOT enough work for everyone. Economy globally are shutting down, demand decline is just beginning. The COVID-19 outbreak is devastating EU, and just at early stage on US. We are facing at least a recession ahead of us, while central banks are running out of monetary policy.
Overall, please be extreme careful about 'buying the dip'. In bear market, there is no bottom, only deeper.
PS: about momentum structure, I've made an indicator on trading view, just search 'momentum structure'. All credit goes to Mr. Michael Oliver.
PS: I've been warning for stock market since July last year (tw.tradingview.com/chart/SPX/Grw4tx8i/), and yes I've missed all the bull rally Q4. It's so hard to be a reasonable person on a crazy bull market... I made this post just to warn those who still think the bull can somehow, keep rally. Don't get hurt again.