we are in 2022 and much similar to 2002 bottom .
history repeat itself.
a bigger rally in 2023 , much much bigger than last few years.
followed by a correction in 2024 for few months and then rally will resume.
the age of bear market is over .
more fear leads to bigger bull market
I consider this an indicator of market breadth . Ignore pundits telling you their doomsday predictions and see that stocks above their 200 sma is :
In a stage two uptrend. More confirmation of this needed, could also be a stage one if we don't see follow-through here and pull into a sideways range which would then be back into stage 1 .
Either way , its no...
The market can go downside but not much longer than a year. It can go side for much longer.
Patient before entering. For example, it can go deep as 0.7 before a V shape.
The vertical lines match $SPX lows with times when only 15-20% of stocks traded over their 200ma. The light blue line is a 10-week moving average and you can see that once it turns up it keeps rising (2008-09 was an exception). According to this broad market indicator, stocks have been performing better since early July.
This is a big picture view, not to be...
This chart shows that pretty much the best point in the history of the stock market to buy was in the first half of 2009. Returns since that low point during very turbulent times for the economy have been phenomenal. The chart here shows that there was indeed a very clear signal that investors could have seen in that this metric of % stocks above 200 day MA...
This indicator anticipated the fall of the SPX well in advance, according to the yellow line on April 12, 2021.
Showing a clear divergence.
As SPX went up, the indicator went down.
Only on January 10, 2022 was there a trend reversal in SPX, going down.
Now the indicator appears to be anticipating a rally.
no matter what happen in the outer world , stock market always behave very different to the information forecasted.
we are entering into extreme fear zone and a huge buying is already started . some stocks are already resisting new lows which is a positive sign .
stocks always form bottom first compared to market.
Let's face the reality, there was a lot of pain those weeks, isn't it?
I was checking MMTH and find some useful ideas.
From MMTH we can understand the health of US Market. Actually we have only 20% of company above 200 average.
2008 showed us a similar situation with a long dump and increasing fear in stock market.
However we see clearly a DeadCat jump...
Chart shows a historical reversal line when in a bear markets. When only 13% of stocks trade above the 200ma, this signals the beginning of a bull market.
Historic data of stocks trading above/below their 200 MA. Jan '21 almost 90% of stocks traded above their 200 MA. Currently, 32% of stocks trade below their 200 MA. Although this downtrend is likely
to continue. Historically speaking, stocks could see a reversal of the trend in the next 3 to 12 months.
MMTH, The percentage of stocks over their 200 day moving average, is a useful tool for clues of the broad market technical trend. Combined with vix volatility index, which measures option premium of at the money options (implied moves), we can get confirmation of changes prices and sentiment. Vix is also called the 'fear index'.
By looking at the chart made here,...
Breadth readings are important to how many pillars are available to support a building. From MMTH or "Percent of Stocks Above 200 Day Moving Average", we can easily see it tops out on February 2021. It keeps going down from 90% to 30% now.
But, a few mega stocks overweighted the index like AMZN, AAPL, MSFT, GOOGL, FB, TSLA, NFLX distorts the picture where we only...
