On March 22, almost a month ago, we discussed scenarios for the direction of the market, specifically the Dow Jones in the weeks to follow. At the time, the market was at maximum fear and volatility measures were spiking to all time highs. Because of the climatic nature of the sell off at the time, … Continue reading Market Update May 14
In a previous article, we discussed the possible scenarios for market direction once peak volatility passed. Once bottoming bars were established by the doji shaped candles (labelled climax low on the chart below), the risk reward parameters are established and projections can be made. With specific reference to the Dow Jones index, the first fibonacci … Continue reading Next Tactics
One of the most infamous sentiments in the investment arena is, "this time it's different." Every major sell off in the history of publicly traded stock markets have elicited those sentiments from observers both amateur and professional. While normal ebbs and flows can be reasonably explained in real time, when a big sigma selloff occurs, … Continue reading Possible Scenarios
Measuring human behavior is not the same as measuring balance sheet items. People as a group will move from euphoric optimism to dire pessimism at the extremes. Group behavior is the underlying premise of technical analysis. As an aside, the mass hysteria surrounding Covid 19 and which has played a large role in market action, … Continue reading Are We There Yet?
As has happened numerous times in history, the markets mounted a high volatility rally after the approximately 10 sigma selloff experienced last week. Panic and euphoria are always lurking in markets and will serve to draw people into their respective manias at the worst times. We have pointed out that there are many signs to … Continue reading The Bounce