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Why The Longer Perspective Matters
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Lets start off with the S&P. Lets start off with the S&P. Look at the way we are now getting back above the March lows. This is so important from a technical perspective because literally every big bull market that we had was confirmed by this kind of pattern.
Furthermore, the FAILURE of such a move through those type of lows was proceeded by market turmoil, much like the decline after the 2000 bubble.
I know it sounds so silly and to be so one dimensional about the market in this fashion: are we above the line or not. The truth is, most market participants spend more time research which MacBook Pro model has the best specs, not which are the best stocks to buy. General market conditions and tone summed up with an index value that has been important in the past does have higher order forecasting ability that is not as one dimensional as it appears to be on the surface.
Now bonds, this has to be one of the biggest developments in markets right now. Look at that reversal off the lows and prior trend line. I was sooo bearish the entire way down. Keep it simple: the fed is hawkish? I sell bonds. Now? Jeez you're talking about a recession and now cuts starting to be priced in. Duration plays should be okay as long as broad conditions don't get much worse. What people don't really understand is that the US consumer is the strongest it has ever been. COVID was a perfect testing ground for just how bad things can get, like the world literally shutting down. A multi-quarter slow down in top line growth? People think the world is going to end? We still have a lot of problems, especially in tech and this is all deflationary for the world. Keep it simple.
Now for a call, I think it is pretty clear. As long as bonds are going higher, any declines in risk should be more or less safe to try. Getting out of the market as a long term player is just asking for trouble with regard to fees, turnovers and taxes. Your accountant or financial advisor can fill you in. If they have problems with you getting into cheap index funds like TLT and SPY, ask why. Gold should do okay in this kind of environment, but I've been hearing about how "Bitcoin" is the new gold. I've largely brushed this off but as I live and breathe more of the tech world, it is so true. Crypto has so much more bargaining power and more accessible than any bullion or gold ETF. This is an interesting rounding bottom.
But BTC looks cleaner.
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PS - Remember, we usually focus on actionable DeMARK based ideas. DeMARK indicators are most utilized within the inner circles of some of the hedge fund traders. We work with retail and institutional traders, particularly on a consulting basis for analysis of global macro and equity markets.