Mid July I posted my trade idea - and so far it's playing out to a T.
A lot of my investor friends have been talking to me about how the market makes no sense and does the opposite of what "SHOULD" be expected. A slowing economy, war, inflation, rising interest rates, etc etc. Even our earnings season was bearish to slightly bullish for the most part. Although I'm preaching to the choir, this is why it's so important to watch the charts and have a fundamental understanding that everything works in waves, never a single direction. I'll also say that with our current fed giving us a clear path for what they plan to do in the future, the market OVER CORRECTS to price in the future. The market isn't efficient however, and that's how mediocre/slightly good news can send it skyrocketing the way it has the past 2 months.
Anyway to the continued trade idea.
Today was important because it solidified investors lack of confidence in the market. We should be on the lookout for the CPI and Jobs report coming soon, along with another fed rate decision. I'll also say I don't know what will cause the crash. I think it's pretty much impossible to call, but you don't need to know what it is, just that it'll eventually break.
Still using 2000 and 2007 as the basis for a market crash, I've plotted out their remaining moves. Green is 2000 and Yellow is 2007. These moves include the percentage draw down for each "wave" along with the same exact time it took to get there. I expect a drawn down from now until October to around $365 which could rebound or continue falling into December. If there's no follow through crash February 2023, we might see a short lived rally that'll die June 2023.
As mentioned in my previous post I have January SPY puts that are currently in the green and doubled down on todays confirmation.
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Increased my SPY put positions now expiring March.
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Sold my spy put positions on 9/28 after the bounce thinking we'd see a small reversal. Waiting for now to see which way the market goes since we're at an important divergence point.
Update to the 2000 and 2008 timeline chart since some of the dates and percentages were wrong -
I have some put spreads in SPY and XLV which expire on Sep 30th and Sep 16th respectively! I am betting to let them open in the hope we get more downside in short term
PlayerNonZero
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@diazipa, Could work out, just a bit too short term for my taste. Yes it'll be a lotto ticket, but I wouldn't be surprised if we see a slow fall for at least for another 4 months so short term plays might not work.
Alphamoney870
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great news for my puts but also quite a scary outlook to drop that much.
PlayerNonZero
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@meadeanthony94, definitely, but a recession is good for the markets long term.
Alphamoney870
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@PlayerNonZero, such is the markets i guess just starting a new cycle now