Connect with us

Economics

Stock Market Trading range: what’s next?

Until the short term trend reverses course, the markets will be stuck in a trading range. There is a solid zone of support for the Dow, which falls in…

Published

on

This article was originally published by Tactical Investor

Stock Market Trading range

Until the short term trend reverses course, the markets will be stuck in a trading range. There is a solid zone of support for the Dow, which falls in the 29100 to 29,550 ranges. To indicate the correction is over, the Dow would have to close above 34,800 on a monthly basis. For the SPX, there is a strong layer of support in the 3600 to 3800 ranges. While the NDX and Russell 2000 tested support and bounced higher, the Dow and the SPX don’t have to take the same path. The indices could diverge over the short-term timelines, but eventually, both the Dow and the SPX are likely to test these levels.

Dow Jones Index

Remember, the more volatile, the more nerve-racking the current action, the better the opportunity. The rally phase will last at least 2X longer, but we suspect, at a minimum, it will last 3X longer, and the intensity will triple that of the downward phase. The actual rally phase count starts only after a long-term bottom is in; if it holds, the current bottom will fall under the intermediate category. A final selling wave will set the bedrock for the next massive rally. Investors don’t understand that the best time to buy is when everything looks bleak; instead, they wait for things to look bright before jumping in and feel very grim when the bottom falls out.

Conclusion

A blistering 3-day rally will probably mark the end of the second version of shock and awe. Market Update May 11, 2022

If the above comes to pass, it will be the best signal that a bottom is in place and that the markets are ready to blast out of their trading range. While the markets have rallied for three days (25th to 27th of May), Wednesday’s move was mediocre. It is acceptable but not perfect—ideally, the Dow tacks on 120 plus points (per day) for three days in a row.

The equation must balance, and a more decisive upward move will always follow a substantial correction. Market Update May 11, 2022

The equation always balances; it’s just human heads that lack balancing, for they want everything to work out ASAP. The markets don’t give a damn about our wishes and desires, and the result is not a pretty sight to those who attempt to defy them. This correction will resolve, as it has since the day we got off the Gold Standard. There is no other direction but upwards over the long run; the long term does not imply years and years; in today’s world, it generally means less than 12 months.

The game plan is always the same; politicians and central bankers have to find a way to help their real masters. These big chaps only favour one thing; lots of money.

Remember these quotes from the May 11, 2022, update; they will serve you well in times of volatility

The same playbook has been used since the inception of the markets. The masses never learn as their reasoning is always the same it’s different this time“. The crowd lives in a never-ending loop of plutos allegory of the cave.

They will never stop using this narrative, for it never fails to produce the desired result. Quality shares are being given away, and the big players are only too happy to grab them.

In conclusion, while the markets are stuck in a trading range, they appear to be building momentum to mount a rally that could last until the 4th quarter. After that, we expect the markets to experience a relatively robust correction.

Other Articles of Interest

Stock Market Trading range

Stock Market Trading range: what’s next?

Until the short term trend reverses course, the markets will be stuck in a trading range. There is a solid …
Read More
History of financial markets

History of financial markets: The Masses are Doomed

If one studies the history of financial markets, one can clearly state that the masses learn nothing other than repeating …
Read More
Covid Resistance

Covid Resistance

Covid resistance: The masses are about to push back Covid resistance is about to take hold as in a Covid …
Read More
does technical analysis work?

Does Technical Analysis work?

Technical Analysis does work to a degree. However, one can’t rely on technical analysis to provide the full picture. Additionally, …
Read More
good stocks

Good Stocks: Value Stocks Usually Fall under this category

One would assume that individuals would be happy to invest in companies with solid fundamentals. One example among many companies …
Read More
Negative Retained Earnings on the rise in the technology sector

Negative Retained Earnings on the rise in the technology sector

What does the term Negative retained earnings imply? According to askalot: Negative retained earnings. When a company records a loss, …
Read More
Market Volatility

Market Volatility: To Dance or Not to?

This pattern of rising Market volatility will continue until the MACD’s (in the weekly charts posted below) undergo a bullish …
Read More
Fed Tapering

Fed Tapering: To Party or not to Party?

The COVID narrative is about to end. This last stage is akin to a selling climax before a bottom takes …
Read More
market sentiment

Market Sentiment: Is Turning too bullish

September has, in part, lived up to its name as being one of the worst months of the year. While …
Read More
Federal Reserve bank of New York

Federal Reserve bank of New York; What’s their Mission?

Like every other Federal reserve bank, they have on a mission only; Inflate the money supply or die trying. The …
Read More
Reflation Rebuttal

Reflation Rebuttal?

Notice a trend here; the herd always needs something to fret about. The media understands this, so they churn out …
Read More
margin debt out of control

Margin Debt: Is it out of control?

Once the Dow challenges 33,000 or the Nasdaq trades past 14.5K, it will move to the “low level” mode. Market …
Read More
Stock Market Cycles

Stock Market Cycles: When to buy & when to sit

90% of traders/investors assume there are only two stages in the markets, buy and sell. There is a time to …
Read More
Stock Market History and Market Crashes

Stock Market History and Market Crashes

History is clear on this topic; the masses never learn. From the Tulip mania to the Coronavirus Pandemic crash, nothing …
Read More

Stock Market Fear Index: The Crowd is still nervous

If fear starts to seep in, remember this. We have a very aggressive Fed, and their only purpose now is …
Read More
US stock market

Can the US Stock Market & US dollar Trade-in Tandem?

Yes, they can, foreigners looking for stability will move money into the US stock market, they win on both ends, …
Read More
tactical investor forums

How To Add Images To PHPBB Forum

How To Add Images To PHPBB Forum Posts The process of adding images to your PHPBB Forum posts is rather …
Read More

Dow jones trends: Sharp Corrections Should Be Embraced

American households are socking away large sums of cash amid economic uncertainties later this year such as a new wave …
Read More
Stock market trends 2020 and Beyond

Stock market trends 2020 and Beyond

On the same token, the reason so many Magellan fund subscribers lost was that they were trying to outdo Lynch …
Read More
Herd behavior: The Mass Mindset Is doomed For Failure

Herd Behavior Always Leads To A Negative Outcome

Herd Behavior: The Gift That Always Rewards With Loss Traders that are driven by fear lose on both ends of …
Read More
Dow trends: Is Dow 33k Next?

Dow trends: Is Dow 33k Next?

There is a 50/50 chance that before the Dow trades to new highs, it could shed 1000 to 1500 quickly …
Read More

The post Stock Market Trading range: what’s next? appeared first on Tactical Investor.


gold

reserve
money supply

us dollar
crash

Economics

Texas Sheriff Drives 4 Illegal Aliens To International Bridge, Deports Them

Texas Sheriff Drives 4 Illegal Aliens To International Bridge, Deports Them

Authored by Charlotte Cuthbertson via The Epoch Times (emphasis…

Continue Reading
Economics

7 Retail Stocks at Risk of Michael Burry’s Predicted Bullwhip Effect

The bullwhip effect is in full focus after Michael Burry recently highlighted the phenomenon in a tweet. He explained: “This supply glut at retail is…

Continue Reading
Economics

How sharp will be the global slowdown?

The Russian Federation’s invasion of Ukraine was yet another supply shock to a global economy still reeling from the consequences of the COVID-19 pandemic….

Continue Reading

Trending