I really think we likely saw a long term top in equities and a major turning point in the various trends that we had since 2009 until recently. I copied the pattern from the high in the year 2000, to give us an idea of what to expect, since that was the last time a yearly timeframe Time@Mode pattern concluded, I think it can serve as a guide from here onwards. Publishing this one for posterity, it's interesting that we already have a Dot Com bubble like chart in $ARKK monthly, definitely very critical to figure out if we already topped, as per the yearly, or if we get a different bear market pattern next. In my opinion, the massive excess we saw since 2020 post COVID, with increased retail participation is akin to the frenzy that started in the year 1998, and topped by 2000, which would fit today being equivalent to that period.
I will try to navigate this period profitably, my strategy is to have a long/short portfolio, buying interesting bullish setups in stocks with lower valuations, commodities related positions, and defensive names, all that have historically fared well during yearly trend expirations when bear markets and long term sideways consolidations started, like between 2000 and 2013, or before, during the 70s. I also short overvalued names where I perceive that the story driving them is exhausted, and are rolling over, with insane valuations and market participants complacent and buying option premium on the way down...while shorting options against my short positions. I manage risk carefully, and have split my portfolio in two: one trading account with 25% of my firepower, and 75% in a long term account where I have only long term long positions, no leverage, and try to sell calls to generate income while holding my long term bets.
Best of luck, let's hope we get further clarity over time. Fitting this scenario would result in a tricky period unfolding for months, but eventually we will get a really steady decline to trade more aggressively on the short side. Patience will reward us here, can't take big risks and expect to make money as a bear simply holding random bearish entries.
Cheers,
Ivan.
I will try to navigate this period profitably, my strategy is to have a long/short portfolio, buying interesting bullish setups in stocks with lower valuations, commodities related positions, and defensive names, all that have historically fared well during yearly trend expirations when bear markets and long term sideways consolidations started, like between 2000 and 2013, or before, during the 70s. I also short overvalued names where I perceive that the story driving them is exhausted, and are rolling over, with insane valuations and market participants complacent and buying option premium on the way down...while shorting options against my short positions. I manage risk carefully, and have split my portfolio in two: one trading account with 25% of my firepower, and 75% in a long term account where I have only long term long positions, no leverage, and try to sell calls to generate income while holding my long term bets.
Best of luck, let's hope we get further clarity over time. Fitting this scenario would result in a tricky period unfolding for months, but eventually we will get a really steady decline to trade more aggressively on the short side. Patience will reward us here, can't take big risks and expect to make money as a bear simply holding random bearish entries.
Cheers,
Ivan.
Comment:
Matching really well here, one more swing up then we have enough time for a monthly down trend signal to pop over time...Most commodities point to tops near August for them, which could be when inflation peaks and bonds start to rebound and we get a recession. Demand has been slowing down, there's some data indicating that's the case, but not yet widespread...TIcking time bomb.
This is how it should look: