It has been a little more than 3 weeks ago when the bulls were looking at blue skies and rainbows, trying to figure out how high the SPX will go. Warning signs were everywhere and our predictive analytics model was waiting for the "time" piece to turn bearish as the last piece of puzzle for the downside to start. (This time period was predicted by Woody Dorsey in December 2018) Now that we got the first drop in place, many are now wondering how low will the spx go, instead of how high it will be heading.
The market will change every day, as money will never stop moving, but human emotions will always have traders doing the wrong thing at the exact wrong time. They will become overly bullish when they should be locking in profits and anticipating a drop and get bearish right before the lows come into play. Our sentiment model confirms that month in and month out. Everybody is worried about missing the next bull market or next bear market. Change that thinking to individual swings within a larger move.
Let me explain-we could be in a bear market right now and it could last into 2022 (Woody's projection) but within that big move, there will be swings in both directions. As a swing trader, catching those swings in both directions is your goal. Don't worry if we are in a bear market, there will be a lot of points to made trading the long side-as we saw from December/June. If we are in a longer term bear market, one can counter trend trade the swings in both directions. What you want to stay away from is trying to catch both the up/downs within that counter trend swing. If higher and you know the top isn't coming for months, just move to buying dips until we run out of time.
To bring this home with our current market, the swing is down and should be here for a while. So one would only be looking to short rallies and stay away from buying dips. But you should always be taking profits and leaving a small position for the home run trade. If you get stopped, you already took profits and you simply wait for the next sell trigger. Once this swing trade lower ends, you would move to just buying dips. Forget about the bull/bear market and don't be scared to miss a trade. It will make you trading life a lot less complicated. Have a great Memorial Day! G
The market will change every day, as money will never stop moving, but human emotions will always have traders doing the wrong thing at the exact wrong time. They will become overly bullish when they should be locking in profits and anticipating a drop and get bearish right before the lows come into play. Our sentiment model confirms that month in and month out. Everybody is worried about missing the next bull market or next bear market. Change that thinking to individual swings within a larger move.
Let me explain-we could be in a bear market right now and it could last into 2022 (Woody's projection) but within that big move, there will be swings in both directions. As a swing trader, catching those swings in both directions is your goal. Don't worry if we are in a bear market, there will be a lot of points to made trading the long side-as we saw from December/June. If we are in a longer term bear market, one can counter trend trade the swings in both directions. What you want to stay away from is trying to catch both the up/downs within that counter trend swing. If higher and you know the top isn't coming for months, just move to buying dips until we run out of time.
To bring this home with our current market, the swing is down and should be here for a while. So one would only be looking to short rallies and stay away from buying dips. But you should always be taking profits and leaving a small position for the home run trade. If you get stopped, you already took profits and you simply wait for the next sell trigger. Once this swing trade lower ends, you would move to just buying dips. Forget about the bull/bear market and don't be scared to miss a trade. It will make you trading life a lot less complicated. Have a great Memorial Day! G
