Where Does The Market Go From Here?
As I have said before, I really do not like oscillators as technical trading tools. I don't use any for trading. Especially the most commonly used tools such as MACD and stochastics. Both are very oversold right now. They may provide anecdotal data but one can't make money consistently using them. Were oscillators back tested over the last one hundred years, users would be bankrupted in a very short period as measured by a handful of years.
I have stripped all references to what this is and have only included a short time frame because I jealously guard my core work. In simple terms, I feel comfortable initiating a long position when the blue line is above the red line. Often that actually happens before a bottom is formed. If nothing else, we often see the blue line start to bounce along a channel showing weakening pressure to the downside. Not here. At least, not yet.
Remember, what we have witnessed is a crash. I've warned of this more than once in 2008. And, more than once we have seen different sectors crash. Now, it's the broader markets. This is not an orderly or controlled decline. No one is in control of these markets. Remember, near stock market peaks, money is transferred from strong to weak hands. That is usually Wall Street passing the bag to main street. Not in this market. Wall Street is holding the bag. Not to appreciate that fact has made fools of many. To hold overnight in this type of environment is incredibly risky. How bad the crash gets or whether the markets can gain a footing somewhere close to here has yet to reveal itself. Needless to say, it is impossible for a bottom to form without this particular metric confirming it.
I have stripped all references to what this is and have only included a short time frame because I jealously guard my core work. In simple terms, I feel comfortable initiating a long position when the blue line is above the red line. Often that actually happens before a bottom is formed. If nothing else, we often see the blue line start to bounce along a channel showing weakening pressure to the downside. Not here. At least, not yet.
Remember, what we have witnessed is a crash. I've warned of this more than once in 2008. And, more than once we have seen different sectors crash. Now, it's the broader markets. This is not an orderly or controlled decline. No one is in control of these markets. Remember, near stock market peaks, money is transferred from strong to weak hands. That is usually Wall Street passing the bag to main street. Not in this market. Wall Street is holding the bag. Not to appreciate that fact has made fools of many. To hold overnight in this type of environment is incredibly risky. How bad the crash gets or whether the markets can gain a footing somewhere close to here has yet to reveal itself. Needless to say, it is impossible for a bottom to form without this particular metric confirming it.
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