Courtesy of Read the Ticker.
TRUMP said ‘we may have to take a hit!. No kidding, with stocks at extreme all time highs, add on the trade wars and you are surely to upset the worlds demand engine (i.e China). Of course you can not change anything with out breaking a few conventions, therefore investors can not be blind to changes in asset prices as president Trump made his intentions very clear.
An investor must understand how the markets work, we know algo’s work the intra-day market to the upside and after the SP500 95 pt sell off today it looks like they work to the down side. Plus Mr Market wants to find out the level of Powell ‘fed put’ is. Is it like Mrs Yellen at -10% ? Or is much lower. The things we are about to learn!
Maybe the SP500 sell off is the Democrats move against the US president, as he has owned the 2018 rally? If it is President Trump warned all investors on June 4th 2018
..”I’m not saying there won’t be a little pain so we might lose a little of it but we’re going to have a much stronger country when we’re finished, and that’s what I’m all about.”..
Knock on effects of a SP500 sell off greater than -12% are:
1) Pensions risk.
2) The debt on share buy backs risk.
3) US Govt tax receipts via capital gains risk.
4) Allows a transfer of funds from stocks to bonds.
5) Will quantitative tightening turn into quantitative easing?
Now for those over 40 years of age, (like the author), you know this market is just ‘Nuts’ and exponential upwards markets always (not some, but all) end the same way.
Like the soldiers at Bastogne during WW2 the only way Mr Market can be rescued is by General ‘Fed’ Powell’s QE4 (a maybe).
A reminder, remember Bitcoins exponential rally: $5000, $10,000, $15,000 on its way to $100,000. It too succumbed to market laws and a +50% correction followed. Folks this is normal. Individual stocks may retrace +50%, but do not worry the central planners will do all they can to slow down and limit leading indexes corrections.
Below we have Apple, Amazon and Bitcoin with Gann Angles applied. Gann angles show time and price performance: how many units of price and time represent trend action. Then you add Fibonacci arcs to measure future resistance levels, nice, know you have an excellent ‘tell me no lies’ indicator.
A good market bet: Eventually Amazon and Apple will succumb to market laws and correct substantially. Is it today, who knows, we wait for more evidence to arrive on the chart to decide that!
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Fundamentals are important, and so is market timing, here at readtheticker.com we believe a combination
of Gann Angles,
Cycles,
Wyckoff and
Ney logic
is the best way to secure better timing than most, after all these methods have been used successfully for 70+ years. To help you applying Richard Wyckoff and Richard Ney logic
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NOTE: readtheticker.com does allow users to load objects and text on charts, however some annotations are by a free third party image tool named Paint.net
Investing Quote…
..”Thus, I affirm, every class of phenomena, whether in nature or in the stock market, must be subject to the universal law of causation and harmony. Every effect must have an adequate cause.”..
William D Gann
..”October: This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.”..
Mark Twain
..”To cause high prices, all the Fed will do will be to lower the re discount rate…, producing an expansion of credit and a rising stock market; then when, business men are adjusted to these conditions, it can check, prosperity in mid career by arbitrarily raising the rate of interest. It can cause the pendulum of a rising and falling market to swing gently back and forth by slight changes in the discount rate, or cause violent fluctuations by a greater rate variation and in either case it will possess inside information as to financial conditions and advance knowledge of the coming change, either up or down. This is the most dangerous advantage ever placed in the hands of a special privilege class by any Government that ever existed. The are private, conducted for the purpose of obtaining the greatest possible profits from the use of other people’s money. They know in advance when to create panics to their advantage, and when to stop panic.”…
Charles August Lindbergh Snr
..The time of maximum pessimism is the best time to buy and the time of maximum optimism is the best time to sell”..
John Templeton
The minute you get away from the fundamentals – whether it’s proper technique, work ethic, or mental preparation – the bottom can fall out of your game.
Basketball Legend Michael Jordan.
