WallStreet-Trading: Risk-Model and Watchlist
The US market ended the first half of 2022 with significant losses to an extend that it makes H1_2022 to the worst first half year since 1970 !!!
The losses in H1_2022 are:
- SP500: 20.6%
- Dow Jones: 15.3%
- NASDAQ: 29.5%
- Russel2000: 23.9%
WHAT NOW?
Stock market analysis over the last five decades tells us that the average non-recession bear-market drops by about 20% over a 7-8 month period. The current bear market is getting very close to that.
The markets are discounting mechanisms and the majority of a non-recession bear market should be priced into the stock market by now. The big question is if the current crisis turns into a more significant longer-term recession. In that case we may have 1-2 additional legs down in the market.
Things to watch out for in the current environment are:
- Inflation
- FED activities
- Geopolitics
- Covid and additional lockdowns
- Stock setups and number of stocks in buyable positions
The market sentiment is still very bearish and the margin debt is negative. Both contrarian indicators would support the transition into a new bull market very soon from now.
The best stocks tend to bottom first, well ahead of the market indices trending upwards again. Continue to do your homework and always be prepared for the upside.
Our risk model rating slightly improved and is now showing an average risk in the current market environment. However, we are not out of the woods yet and highest caution is still advised.
This is the time to test the market with smaller pilot-buys and see if they start working. If so, the concept of progressive exposure should be applied, which means you should increase exposure only on the heels of winning pilot buys. Use the gains from the pilot buys to finance the additional risk for new positions.
Here is the link to the updated watchlist for the US stock market:
de.tradingview.com/watchlists/75013711/
The losses in H1_2022 are:
- SP500: 20.6%
- Dow Jones: 15.3%
- NASDAQ: 29.5%
- Russel2000: 23.9%
WHAT NOW?
Stock market analysis over the last five decades tells us that the average non-recession bear-market drops by about 20% over a 7-8 month period. The current bear market is getting very close to that.
The markets are discounting mechanisms and the majority of a non-recession bear market should be priced into the stock market by now. The big question is if the current crisis turns into a more significant longer-term recession. In that case we may have 1-2 additional legs down in the market.
Things to watch out for in the current environment are:
- Inflation
- FED activities
- Geopolitics
- Covid and additional lockdowns
- Stock setups and number of stocks in buyable positions
The market sentiment is still very bearish and the margin debt is negative. Both contrarian indicators would support the transition into a new bull market very soon from now.
The best stocks tend to bottom first, well ahead of the market indices trending upwards again. Continue to do your homework and always be prepared for the upside.
Our risk model rating slightly improved and is now showing an average risk in the current market environment. However, we are not out of the woods yet and highest caution is still advised.
This is the time to test the market with smaller pilot-buys and see if they start working. If so, the concept of progressive exposure should be applied, which means you should increase exposure only on the heels of winning pilot buys. Use the gains from the pilot buys to finance the additional risk for new positions.
Here is the link to the updated watchlist for the US stock market:
de.tradingview.com/watchlists/75013711/
Combing the BEST of two WORLD's: Cathie Wood & Mark Minervini
