Background:
Due to unprecendented market intervention by various central banks, we are witnessing an increasingly volatile market. Gone are the days where market moves in orderly manner with orderly pullback in between.
Instead, corrective waves are exhibiting strong movements akin to impulsive moves.
Market can be imagined as having two throttles at extreme ends of bullish-neutral-bearish spectrum.
Instead of slow/gradual transition, market now switches gear swiftly to either bullish or bearish throttle, hence the dramatic moves and being coined as Kangaroo market. Excess of bullishness will breed dramatic sharp rebound that die suddenly when the 'long' boat is overloaded, ensued by excess bearishness for dramatic decline, which die suddenly when the 'short' boat is overloaded, rinse and repeat.
Despite the potential erratic moves, I'm extremely bearish biased for the moment, and expecting the dramatic up/down swing in the nett will yield (ugly) negative return to stock market in the long run.
TLDR: Kangaroo market here to stay for Q3 2020, the above tries to explain the mechanistic process.
Q3 will potentially look like another 'trading range' to the majority of trading community, but it may not be obvious to the naked eyes that Q3 may actually stage a series of Wave ((1)) decline and Wave ((2)) rebound of a larger 5-wave decline, which will go full blown more likely on Q4.
Overall bearish to neutral, good opportunity to trade the dramatic swings which are non-obvious downtrend of big picture.
Should SP500 breaks above 3230, the above gameplan will remain as the wildest imagination of the author.
Due to unprecendented market intervention by various central banks, we are witnessing an increasingly volatile market. Gone are the days where market moves in orderly manner with orderly pullback in between.
Instead, corrective waves are exhibiting strong movements akin to impulsive moves.
Market can be imagined as having two throttles at extreme ends of bullish-neutral-bearish spectrum.
Instead of slow/gradual transition, market now switches gear swiftly to either bullish or bearish throttle, hence the dramatic moves and being coined as Kangaroo market. Excess of bullishness will breed dramatic sharp rebound that die suddenly when the 'long' boat is overloaded, ensued by excess bearishness for dramatic decline, which die suddenly when the 'short' boat is overloaded, rinse and repeat.
Despite the potential erratic moves, I'm extremely bearish biased for the moment, and expecting the dramatic up/down swing in the nett will yield (ugly) negative return to stock market in the long run.
TLDR: Kangaroo market here to stay for Q3 2020, the above tries to explain the mechanistic process.
Q3 will potentially look like another 'trading range' to the majority of trading community, but it may not be obvious to the naked eyes that Q3 may actually stage a series of Wave ((1)) decline and Wave ((2)) rebound of a larger 5-wave decline, which will go full blown more likely on Q4.
Overall bearish to neutral, good opportunity to trade the dramatic swings which are non-obvious downtrend of big picture.
Should SP500 breaks above 3230, the above gameplan will remain as the wildest imagination of the author.