The only question today is how much of a crash will we have to endure, or should I say profit from as traders? The problem is as a short seller, it is the toughest way to make money. The market goes up by default as there are millions of people working every day in these companies to add value and make profits and earn the money that feeds their families and gives them an improved quality of life. It is in the vested interests of humanity that the stock market goes up.
However, there are also times when the people investing in those companies lose their confidence. Negative sentiment and fear in the stock market kicks in and suddenly we are into panic mode. This linked fear and greed index uses the amazing tradingview data to help you understand the market sentiment.
But, when we take a look at the technical analysis this backs the fear up. The supply and demand as shown in the technical indicators through negative divergencies is clear. Let's compare the mini-crash of 2016 with today. On the left of the chart we see: 1. Stock price rising 2. Flat RSI 3. Strong CMF negative Divergence
Fast forward to 2018: 1. Stock prices rising 2. Strong RSI negative divergence 3. Strong CMF Negative Divergence
The technical analysis points to at least a mini-crash, and who knows what potential size of a maxi-crash.
Note that point 4 on the right sees price on the weekly chart enter the Ichimoku cloud from the top, which is never a good sign.
I am nearly a perma-bull, but just not right now. Hold on to your pants it is going to be a ride.
Q2) Barry I am an Independent Advisor/Trader/Economic Strategist managing my own portfolio and have some Funds under management for a few others. Given my below contention re: drawdown of 40% in Housing Market here over next couple of years, in the US do you have a SIMPLE product that you guys use that will effectively allow me to Short the Banks Mortgage books and thus the overvalued Real Estate Sector here? A la "The Big Short'?
My preliminary investigations seem to have drawn a blank unless you go to an Investment Bank to buy Credit default Swaps which may be beyond the scale of what I am prepared to do. We'll see(?) as I am inexperienced in this area..
Are there some kind of PUT options you guys use? I think I have about a year for this Thesis to really start to materialise so any help/info you can offer would be greatly appreciated.
BTW I LOVE Trading View thanks for putting me on to it. Easily the BEST Tools I have ever had access to. It has made my Trading Life a breeze!
Also re : The Royal Commission into Banks I mentioned earlier>
For some cynical entertainment that only a Finance type could find humorous grab some popcorn and watch this vid on how the Banks were charging Dead Clients Estates (Their Orphans/Widows etc) fees for service but providing NO service and not telling the Estates they were doing so !!!
See> "Royal commission round 2: Gouging the dead April 16, 2018"
halfway down at the below URL which includes plenty of entertaining OMG/WTF!!! exchanges from the Royal Commission. You cant make this stuff up!
Q 1) The green/red dots in the volume bars they look to be some sort o linear P & F charts if so this seems a superior 'one glance' way of viewing the P & F overlaid in your other charts so as an an Indicator rather than a Chart instead. Have I got that right or is it something completely different?
If correct can you tell me how I switch that on ( I guess its in 'Indicators'?) but not sure what it would be called. I'll go hunting anyway..
Q 2) Here in Australia our recent correction has loosely followed what has happened in the U.S., (our Market movements generally do but not always) as so many TransNationals dominate the Global Bourse's in scale these days. See the XAO's precipitous fall over the last month.
As is usual when in approaches that notorious day of market infamy - October 29th - This Monday here, the usual panic merchants are squealing 'CRASH!' and the retail and older Investors are bailing, understandably with relatively fresh memories of the 'Royal Scam' of 2008 forefront in their minds.
We are in a similar position to where you guys were then in that the mainstream Housing bubble has popped last Christmas and prices have retreated 10% already after a decade + of super low int. rates. Mortgagees are under pressure as an artificial Demand furphy pumped up prices to ridiculous levels (I expect 40% drawdown from peak at bottom) caused by corrupt Govt Policy made on behalf of Banks/International Socialists/Global Scum Inc causing an unsustainable Investment boom combined with MASSIVE immigration of 2nd/3rd World types crowding out the local Market and their kids looking to become First Home Buyers..
I am confident this is a Correction for us and your drawdown is primarily down to "no more easy money" by the Fed and the Uber riche have seen the writing on the Wall and headed for the Exit in some of your overvalued Indexes. Ie Tech.
Please comment on whether you think that is an accurate insight..?
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liberatedstocktrader
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@craigemm, HI Craig, thanks for your comments very interesting stuff. The big short indeed. You comments sound right.
Q1. The system I use with the red and green dots is is here. liberatedstocktrader.com/next-stock-market-crash-prediction/ I have managed to port it to tradingview pine script from wordens stockfinder. It works very well. I will release it soon on tradingview for those who buy the system.
Q2. I had no idea the situation was so bad in AUS banking thanks for the insight.
I am glad you like tradingview - it does rock :)
That video is unbelievable.
Re your short, can you not buy puts or sell calls an a relevant reit or banking eft?
thanks Barry. "puts or sell calls an a relevant reit or banking eft? " !!
That's a great idea and don't know why I didn't think of it myself but sometimes you just need to bounce ideas off someone else knowledgeable and all of a sudden a key is turned, the penny drops and the lock is open and the door awaits to be kicked in!
Lol. That's great Man thank you so much..
I will get round to posting some ideas and comments on my page soon but have been just so busy exploring the vast fertile Trading landscape that TradingView offers, have been having a great time with the Charts. The ease of use puts many more expensive options I have looked at to shame!
Hoping we see a bounce on Monday and not disaster at all. We have just turned Spring proper here and the weather is perfect- wide blue sky, no clouds to be seen, gentle sea breeze. 28 degrees!
Its going to be a great day for a HUGE bounce I can feel it in my bones. If I make some money I'll look into your alert system more closely.
All the best.
Craig
craigemm
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@liberatedstocktrader, had a look at the system wow! Those results from how the system performed in the first two crises of this Millenia are astounding!
Have you tested it on data from the last Century. I imagine that is more difficult to get hold of complete data the further back you go..?