Thread: Bear Cave 2 (Bull Allowed)

Hmmmmm..... I guess it's who you ask

SPY monthly: The melt-up..... Odds of tagging the 40 mma during the next YCL continue to increase. LOL..... That doesn't mean it will, but the point of the article is Risk Management. Your position should be smaller now. Why the 40 mma. I use the 40 mma as the mean. It doesn't get to far above it in a normal market, and ususally tags it during YCL or corrections. ( see my chart below and the 40 mma is the red line) It's currently around 42%ish above the mean, and historically that rubber band is very stretched!

The Melt-Up Has Already Happened
Jeff Clark | Sep 2, 2021 | Market Minute | 3 min read

Carve another notch is the “monthly winners” column.

The S&P 500 closed higher for August, making it the seventh month in a row of gains. That’s the longest monthly winning streak in over 30 years.

But, can the index make it eight in a row by rallying even more in September?

I’m going to say “no.”

Look at this long-term monthly chart of the S&P 500 (SPX)…

The stock market has rallied almost straight up over the past year.

So, if you’re piling into the stock market right here in anticipation of a “melt-up” phase – you’re too late. The melt-up has already happened, and the chart reflects it.

This action has created a “parabolic” move on the chart. Parabolic moves are unsustainable. And, when they burn out, the ensuing decline often wipes out nearly the entire rally.
https://www.jeffclarktrader.com/mark...eady-happened/

Absolutely, and there is zero risk management anymore. I hear mostly, "I like to be risky in stocks." Very easy to say when it's going up. When it goes down, that's when people suddenly become "buy and holders". Will stocks outperform bonds over the long run? Yeah, they should, but it will not be a smooth ride. No reason to be taking on more risk than is needed to obtain your personal goals and that's where so many go wrong. How much is enough? "Just a little... bit.... more, then I'll sell."

RE: Melt up; Sjug recommended buying bonds a few weeks ago and he's been calling for the melt up since early 2019. I can't disagree as I keep a solid allocation to bonds at all times, even in a bull market.

Was stopped out of a stock last week with mostly LT cap gains and it's down 10% since. Some of that money was reinvested into a bond ETF.

SPY monthly data: A longer term look..... Note how far stretched above the 40 mma the SPY is today. That is mainly because of the Fed.... A couple of trillion worth...

Originally Posted by robo

That is mainly because of the Fed.... A couple of trillion worth...

And prodigies like Keith:

“I knew I was looking for high volatility when I got into this,” said Keith Williams-Parker, 38, a teacher in Virginia who has the majority of his roughly $85,000 portfolio in companies that merged with SPACs. It peaked north of $100,000 earlier this year.

Mr. Williams-Parker said he tries to emulate star technology fund manager Cathie Wood in targeting companies like SoFi and energy-storage firm Stem Inc. that have growth potential.

“I am still swinging for the fences,” he said.

https://www.wsj.com/articles/spac-ro...e-11630575180?

Zeberg calling for a bust this fall and then a Commodity Boom.



crash.jpg

Sentiment: bears refuse giving up

The problem with this market...
...is that bears remain at elevated levels. Latest AAII sentiment shows bears refuse giving up. Therefore, the upside remains the main force...

"The market can remain irrational longer than the bears can remain solvent."

Looking only at the “normal” seasonal tendencies without comparing it to actual prices can lead the observer to miss things, and that’s where this week’s chart shows its importance. If you tilt your head just slightly you can see that the movements of the DJIA this year are matching the pattern of the Annual Seasonal Pattern, but they are just doing so a little bit early. It is like the teeth of a key fitting into a lock, just offset a little bit. That is what the slanted lines are intended to help the eye to see.

September has a bad reputation as a awful month for the stock market. This year, that bad stuff is likely to wrap itself up early in the month, and then surprise a bunch of analysts by bringing a rising stock market for the rest of the month of September.

https://www.mcoscillator.com/learning_center/weekly_chart/seasonal_turns_arriving_early/

seasonal_pattern_sep2021.jpg

My tracking data:
$USD: Waiting to see if we get a turn and how the miners will do..... A nice bounce for the miners so far.
SPY daily:
SPY weekly: Will we get a decline and an ICL this month? One would think so..... LOL..... It's been an amazing run for the SPY and the trend remains up!
GDX daily:
SPY monthly: Stretched above the mean:

The dollar:

The 9/04/21 Weekend Report Preview

The dollar closed below the 50 day MA on Wednesday then delivered bearish follow through Thursday and Friday.
Friday was day 25 for the daily dollar cycle, which places it in its timing band for a DCL. Closing below the 50 day MA signals that the intermediate cycle decline has begun. The dollar also closed below the lower daily cycle band. Closing below the lower daily cycle band ends the daily uptrend and begins a daily downtrend. It is another signal that the intermediate cycle decline has begun. However a failed daily cycle is needed to confirm the intermediate cycle decline. A break below the previous DCL of 91.76 will form a failed daily cycle.

Stocks:

Stocks formed a daily swing high on Friday.

At 26 weeks, stocks are due for an intermediate cycle decline. There are bearish divergences developing on the oscillators. With a peak on day 10, if stocks deliver bearish follow through to close below the 10 day MA that would set stocks up for a left translated daily cycle formation. Then a break below the previous daily cycle high of 4480.26 can be used as a hard stop to to avoid a potential ICL decline.
https://likesmoneycycletrading.wordp...eport-preview/

SPX - 4th most closing highs in 100 years
The correction these days is the melt up as upside remains the main pain trade.



The year with the most new closing highs over the past 100 years is 1995.
https://themarketear.com/

LOL..... Time to get ready for the real melt-up..... Ok, I will be watching.... Amazing run!

Still not a believer in the SPX seasonality?
The 1995 pattern continues to trade rock solid. Time to get ready for the real melt up?

SPX 1995 vs now needs little additional comments.
https://themarketear.com/