Crash?

Scataphagos

Scataphagos

Tongues are wagging... EVERYBODY sees that "the crash" has already started.

Cramer crsh.PNG


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Wouldn't it be a hoot if instead the market did another "rip your face off" rally like it did in March? Actually that would be classic... a large "ABC correction Wave2*", and THEN start the "Wave 3 Bear Market Decline". Perfect... for "everybody who's calling crash right now"... Mr. Market is tricky**, you know. :)

The "A" would be the March ripper
The "B" would be right now... ideally holding at or above the March low
The "C" would be a bounce back up to/near the March high... THEN start Wave 3 Down.

I don't have any chart capability that will let me show it well, so you'll just have to use your imagination a bit.

*The ABC correction is by far the most common Wave2... and it's almost always very clear to see... the only possible ABC I see working at this time is the one described. If it were to turn out to have an upward slope, that would also be a "bear flag".If the market blasts through the March lows soon (like, this week), then this read is invalidated.

**Speaking of tricky... there is also a read on the chart that my (possible) read of "Wave2 in the new bear market" is actually "Wave 2 of the5th on the UPSIDE in the continuing bull market". I'm skeptical at this time, but it has not been invalidated... so gotta keep it in mind.

"How can there be such opposite views at the same time", you ask? The market is in "congestion".. a period of uncertainty and confusion.

One of these will be invalidated, and soon!
 
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Might be a bit early to buy, the market needs to make new lows and suck in more short sellers and shake out more of the weak long holders.

Then it will make another spike to the upside.
 
No specific prediction on what stock indices will do, but FWIW I don't think another rally of the type described would do much of anything to neutralize bearish sentiment. It's easy to forget since every moderately fearful sentiment reading since 2009 has been a buy signal, but sustained bear markets do feature long periods of time (months to years) where sentiment is grim, but price keeps falling regardless.
 
Fed can do whatever it wants to do. However, the limit comes when something is out of control, such as the current inflation. The worst situation is Fed is forced to do something it doesn’t want to do, like increasing interest rate.

It’s kinda akin to having to sell your house during a housing market crash because you lost your job and cannot afford the mortgage.
 
Jzwu2017 said:
Fed can do whatever it wants to do. However, the limit comes when something is out of control, such as the current inflation. The worst situation is Fed is forced to do something it doesn’t want to do, like increasing interest rate.

It’s kinda akin to having to sell your house during a housing market crash because you lost your job and cannot afford the mortgage.
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they made this bed, and now have no choice. Rates are going up. I have said it few months back (not my words) that when Fed is serious about tightening they will take rates much higher anyone can imagine.
 
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