RE: US Stocks Breakouts & Breakdowns - SP500, NYSE, & Nasdaq Stock Charts
(2020-04-13, 10:53 PM)isatrader Wrote:(2020-04-13, 10:18 PM)marry123 Wrote: Interesting fact is that if the stock market rallies over 50% from bottom, the bottom is in and bear market is over (we have rallied 50% right now so need to see if we can get over 50%). This has happened 20 of 20 times in the past. This data is from legendary trader Larry Williams who on March 17 became bullish and called the market bottom. He does not think we will see another low based on all his technical indicators.
https://www.youtube.com/watch?v=eAaPIW8GLy4
It was interesting, and he might be right. But in Stage Analysis we use the Weight of Evidence for Market Timing (chapter 8 in the book), and so far the short term is bullish, and the medium and long term remains on bearish signals, whereas from the Stages point of view all major indexes are in Stage 4. But if that changes. I'll change with it. But for now the asset classes in Stage 2 are US Treasuries and Physical Gold, and Stocks Indexes are in Stage 4. So the methods rules tell me to avoid stocks for now or to even go short them if they pull back to the Stage 4 breakdowns levels and start to rollover again, and to stay long physical gold and treasuries while thy remain in Stage 2 uptrends.
This is the point of having a defined method like Stage Analysis, as when things crazy and there's noise from all around in the financial media, the TV and on social media etc. You always have a playbook of what you should be doing at that point in time. But I understand that it's easy to be templated to do other things as we are not machines. But personally I prefer a time tested method, as that's what gives you an edge over the long term, even if you miss the occasional short term gain.
Thanks Isa, am waiting patiently along with you for the proper signal based on stage analysis.