How do you take into account seasonality in this context? Would you mind explaining how does heading into Q4 make a difference in your interpretation of the market?
I'm ignorant about seasonality.
Market observations and actions
- Thread starter Market_Observer
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How do you take into account seasonality in this context? Would you mind explaining how does heading into Q4 make a difference in your interpretation of the market?
I'm ignorant about seasonality.
The seasonality atm is October which is not bullish usually.
The other thing, I don't think bullish nor bearish can be confirmed, rather there can be conflicting signals during chop.
I remain tentatively bearish biased for this month, (mainly because of October and we have run hard) or another way of looking at it, high risk atm. Be good for day traders, lousy for long only swing traders my guess.
I have a 'secret little indicator' which is telling me we are close to a major tipping point where a sudden sharp down move is highly likely, not there yet, a couple more good down days on SPX & NAS will bring it on imo.
Interesting
I won't be so rude as to ask you for your little secret. I will be observing the market to see if your indicator plays out to be right.My experience is when near tops or bottoms, these zones have increased volatility and often conflicting TA signals, ie it may appear bullish but it turns bearish and vice versa. This is where if you are too early in your directional bet it goes wrong.
A bottom may signal a continuation down (bearish signal continuing) but ends up as a bottom. (bullish)
So tops and bottoms are usually very tricky.
A few observations:
1) Margin Debt: From my perspective, this is only useful in hindsight because margin debt is expanding as a market is moving up -- it won't call the top for you -- only provides some insight as to the danger of a top when people start liquidating positions.
2) Seasonality: Markets have a tendency to bottom in October. Months of November / December have a tendency to be favorable. The bottom could be in or could be later this month if this is the scenario. I have been operating under assumption that the October lows are in. If I'm wrong, I will adjust. I like today's action so far with the sell-off and rebound.
3) Market Risk Indicators: I have a handful of indicators that I look at to determine whether the market is a risk-on / risk-off situation -- these are independent of my technical read. We have been risk-on since Spring of 2020 without any change.
1) Margin Debt: From my perspective, this is only useful in hindsight because margin debt is expanding as a market is moving up -- it won't call the top for you -- only provides some insight as to the danger of a top when people start liquidating positions.
2) Seasonality: Markets have a tendency to bottom in October. Months of November / December have a tendency to be favorable. The bottom could be in or could be later this month if this is the scenario. I have been operating under assumption that the October lows are in. If I'm wrong, I will adjust. I like today's action so far with the sell-off and rebound.
3) Market Risk Indicators: I have a handful of indicators that I look at to determine whether the market is a risk-on / risk-off situation -- these are independent of my technical read. We have been risk-on since Spring of 2020 without any change.
May be what has been going on past couple of weeks! If we follow-thru today, bullish thesis seems to be in play.
Last couple of weeks bearish, today and y'day bullish, not halfway thru October yet, could be a bull trap. This is what I meant, seems obvious bull right now, but it can spectacularly backfire, looks and feels like a bottom, but good chance it isn't.
Mkt loves to crucify the greedy and unwary.
My little 'secret indicator' says its too early yet, very easily see this huge reversal next couple of days, it would cause a nice degree of mayhem.
The real danger zone is still a bit lower, no threat of mkt plunge yet imo.
My "secret" indicators seem to be confirming the bullish scenario. We'll see what happens!
Best wishes!
Best wishes!
Last couple of weeks bearish, today and y'day bullish, not halfway thru October yet, could be a bull trap. This is what I meant, seems obvious bull right now, but it can spectacularly backfire, looks and feels like a bottom, but good chance it isn't.
Mkt loves to crucify the greedy and unwary.
My little 'secret indicator' says its too early yet, very easily see this huge reversal next couple of days, it would cause a nice degree of mayhem.
The real danger zone is still a bit lower, no threat of mkt plunge yet imo.
Deep down, I'm not mkt bearish, but am expecting some fireworks ahead which will just be more volatility, more move down, but nothing fatal.