Are we going to face a strong correction?

[eurusdzn]

After a long time of low volatility and liquidity wouldnt it be surprising if
liquidity itself sucked in credit and equity markets.
Someome has gotta be trapped after all this. "NoBid" may be a good ET handle.

 

[dbphoenix]

A correction would be a 10% fall, thus a strong correction 20% ?

Defining corrections by percentages doesn't matter as much as being able to detect changes in the trend of price movement. One may, for example, wait for "20%", then not have the courage to buy if and when price falls that much.

Detecting these changes isn't a matter of charts and indicators and patterns but of seeing when buyers are refusing to pay the ask. Charts are just an illustration.

 

[xandman]

The move in the VIX is almost inline with previous moves in the last 2 years. Surely, what is happening right now is not as financially dire as previous mini-crises.

As for valuations, I am neutral on that.

 

[Jakobsberg]

"Are we going to face a strong correction?"

No idea, but I have a plan and credit line in place if we do.

SP500 is down a little now but based on past history most small drops don't turn into a big one.

I actually hope we do have a panic selling and drop of 10-15% because I think we will see another high before this cycle is over. BTW - I will change my mind if the economic data and earnings change

EuroStoxx50 and DAX is already off 7% so bought a little this morning.

 

[Zr1Trader]

I predict that we will have a 20-30 year stock market slump like Japan did with their easy money policies. We may go a lot higher from here before that happens. This may be the start, I don't know and no one else knows either including the FED.

What I do know is that I'm not a buyer and holder of US stocks at this point in time for the majority of my portfolio.

 

[dbphoenix]

We are pretty much where we ought to be, at least with regard to the SPX. I wouldn't get excited unless we break 1900. According to AMT, that would be the most likely place for a reversal.

And here we are at 1903.

Heads up.

 

[dbphoenix]

10pts so far in the ES. 25 in the NQ. Nice day.

 

[xandman]

I think we get a rally when Russia finally invades.

However, the defections are a good sign that Ukraine will cave.

 

[dbphoenix]

Update on my "where are we most likely to bounce" post from the 2nd.

August 2

We are pretty much where we ought to be, at least with regard to the SPX. I wouldn't get excited unless we break 1900. According to AMT, that would be the most likely place for a reversal.

And, for grins, the NDX. If we bounce off the mean of the next older channel (we just fell out of the most recent one), we'll be doing so at about the same time that the SPX reaches the bottom of its channel (above). If we drop all the way to the lower limit, that'll be 10%.

August 6

And here we are at 1903.

Heads up.

And the charts. One of the first charts has disappeared, but I happened to keep copies. So the first two are from the first post, the second two are from this week. As you can see, the SPX bounced off its lower trendline and the NDX bounced off the mean of its trend channel, as anticipated. If you find this interesting, see the AMT link above.

 

[xandman]

If SPX runs to catch up to NDX, that will mean that NDX will probably break though the upper trendline.

At this point, we may be going thru a final parabolic stereotypical of market tops. A last hurrah before rate increases.