A lot of this going on, or attempting to go on as of late, has to do with waiting for a bottom. Three come to mind are FB, SQ, and PYPL, but there are plenty more. I am trying to accustom myself to a new type of market, that does not appear, at this time, to be bullish. For most, it is apparent the reasons why we may be dipping out of a bull market. Either way, one has to adjust.
The market is bearish as of late. Take a look at QQQ, SPY and DIA. All 3 are under their 50 day SMA. This is usually a bearish outlook, even though moving averages are lagging indicator's, The Russell index is also under this average and I see large players shorting these indexes. So knowing bottoms can become valuable so you do not lose, or as much anyway. )o:
How do you Know you are at the bottom? You can not for sure and bottoms can be harder to call than tops. I prefer calling a top over a bottom any day of the week! Bottoms have all kinds of tricky patterns whereas tops only have a few.
You can look at indicators. For instance you can wait until the RSI is pointing up and over 50, or until the MACD does a crossover of the 0 line (MACD is simply moving averages, 13 and the 26). Sometimes simple is best but will not always get you where you want to go. But then nothing always will and accepting this can be paramount.
Higher lows is another strategy. Yet Bear Flags also make higher lows for a short amount of time, so you have to continually be on guard if you plan to hang for any length of time. Sux Rox! Bear Flags trend up against the prevailing trend and then they can burn you. I hate bear flags! They can fool you in a heart beat.
Candle patterns like an engulfing candle, the abandoned baby, the morning star can also be used to call a bottom. Do they always work? Possibly the abandoned baby is the best, but confirmation is a must with candle patterns.
Patterns like an inverse head and shoulders can also be of value but only when they break the neckline.
The yearly low can help, but if price is in the gutter, the 3 year low can come in handy. Still no guarantee. I find the 3 year low to be more helpful when a stock is in a nose dive. Or maybe, in some instances like parabolic arcs, just hold your horses and sit on your hands. It can be absolutely amazing how low price can go )o:
I think looking at volume plus perhaps and another one of the above, is the most helpful to me. But the fact is, price can be at a bottom for a year or more, while new and smart money is buying the whole time. ACAD is an example of a stock that became so low in price, I could not resist.
Most of the folks who are hired to invest for these conglomerates, will not even be alive 20 years from now so they are different from me or you. Something to think about. I like to look at NVI and OBV for volume, but looking at average volume is also a good thing as long as it is not red volume.
Falling below the lower band of Bollinger bands was working when we were in a Bull market. But in reality this is bearish, and in a bear market, this can be a bearish signal. Price used to snap back in when I set the standard deviation of 80. Not lately.
Tell me where there is sanity! It does look like all 3 I named are approaching their bottom, with SQ in the lead. Thinking FB will get closer to 200, or below perhaps/candle does not look so great. PYPL needs to stop missing earnings and I am a PYPL fan, but needing to see something bullish to help this one out. 3 year low is 82.07
Never say never. Anything is possible unfortunately and even dirt can get cheaper )o" I am trying not to fall for rallies up, unless to sell, but especially if you are in for the long term right now.
Maybe sit on your hands if you have to do so, or perhaps trade short term (o:
Patience can be a virtue.
The market is bearish as of late. Take a look at QQQ, SPY and DIA. All 3 are under their 50 day SMA. This is usually a bearish outlook, even though moving averages are lagging indicator's, The Russell index is also under this average and I see large players shorting these indexes. So knowing bottoms can become valuable so you do not lose, or as much anyway. )o:
How do you Know you are at the bottom? You can not for sure and bottoms can be harder to call than tops. I prefer calling a top over a bottom any day of the week! Bottoms have all kinds of tricky patterns whereas tops only have a few.
You can look at indicators. For instance you can wait until the RSI is pointing up and over 50, or until the MACD does a crossover of the 0 line (MACD is simply moving averages, 13 and the 26). Sometimes simple is best but will not always get you where you want to go. But then nothing always will and accepting this can be paramount.
Higher lows is another strategy. Yet Bear Flags also make higher lows for a short amount of time, so you have to continually be on guard if you plan to hang for any length of time. Sux Rox! Bear Flags trend up against the prevailing trend and then they can burn you. I hate bear flags! They can fool you in a heart beat.
Candle patterns like an engulfing candle, the abandoned baby, the morning star can also be used to call a bottom. Do they always work? Possibly the abandoned baby is the best, but confirmation is a must with candle patterns.
Patterns like an inverse head and shoulders can also be of value but only when they break the neckline.
The yearly low can help, but if price is in the gutter, the 3 year low can come in handy. Still no guarantee. I find the 3 year low to be more helpful when a stock is in a nose dive. Or maybe, in some instances like parabolic arcs, just hold your horses and sit on your hands. It can be absolutely amazing how low price can go )o:
I think looking at volume plus perhaps and another one of the above, is the most helpful to me. But the fact is, price can be at a bottom for a year or more, while new and smart money is buying the whole time. ACAD is an example of a stock that became so low in price, I could not resist.
Most of the folks who are hired to invest for these conglomerates, will not even be alive 20 years from now so they are different from me or you. Something to think about. I like to look at NVI and OBV for volume, but looking at average volume is also a good thing as long as it is not red volume.
Falling below the lower band of Bollinger bands was working when we were in a Bull market. But in reality this is bearish, and in a bear market, this can be a bearish signal. Price used to snap back in when I set the standard deviation of 80. Not lately.
Tell me where there is sanity! It does look like all 3 I named are approaching their bottom, with SQ in the lead. Thinking FB will get closer to 200, or below perhaps/candle does not look so great. PYPL needs to stop missing earnings and I am a PYPL fan, but needing to see something bullish to help this one out. 3 year low is 82.07
Never say never. Anything is possible unfortunately and even dirt can get cheaper )o" I am trying not to fall for rallies up, unless to sell, but especially if you are in for the long term right now.
Maybe sit on your hands if you have to do so, or perhaps trade short term (o:
Patience can be a virtue.
Comment:
Correction, set the moving average on 80 verses 20 with bollinger bands. No the standard deviation
Comment:
I like the bands, but many do not. Standard deviation of 2 or 3 can be helpful with 2 being the norm. I like the moving average on 80 verses 20 when looking of bottoms.
2-17 FB: Price is trying to bottom and recovered some ground from the low today which is a difficult day for any recovery in price. Good sign but still watching.
SQ: Possible bear flag but not a long pole and is a small flag.
PYPL; Continues to make lower lows.
When the sellers become exhausted, there will be buyers left. The 3 securities I referenced are all popular stocks in the past, so there were a lot of buyers on the agenda that are now sellers. This can make bottoming a slower process because there are a bunch of sellers. Many are in panic mode at this point.