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Very good, albeit sobering, S&P T/A article from MW updated after the bell Wednesday. Further S&P upside potential looks very limited before the selling begins again.
And so the selling began in earnest overnight and is continuing throughout the day.
Way too early for the T/A to claim victory, but he clearly has a leg up on it based on today's action. Further gains beyond yesterday's close appear improbable and a re-test of the lows looking likely at this point.
Right now? My first-round screening question is do people/companies *need* what the ticker sells regardless of politics or economic conditions? Or is it seriously exposed to consumer whims, tariffs, or other fickleness?
If the first one is 'yes', it's a possible investment for me and worthy of more analysis for potential new buys. A 'yes' to the second question rules it out for me.
To wit: Nike, Starbucks, Carnival Cruises, Apple, TSLA, chips, etc? No. But regulated utilities, midstream pipelines (of NG), and some pharma? Yes.
As far as T/A goes, I look at price action and briefly glance at where there's any historical 'congestion' to indicate 'support.'
The T/A provided in the link is primarily Fibo retracement stuff and gap filling, with a look back at similar scenarios and outcomes.
BTW, I wasn't clear. My question was more about index or fund/ETF level investing, but it of course also relates to indv stocks.
Forgive me if I'm missing the boat here but...
Please re-read what you posted because it's pretty confusing, at least to me, and I really like the screening (for stock purposes) and want to understand it.
To wit, there are TWO questions in your first-round screening. They're IMO opposing questions, that is, if you answer "Yes" to the first, you answer "No" to the second.
You then say, "If no..." "No" to which one?
Then for your group answers of "No" or "Yes" for the companies, which of your two questions are you answering?
And also, as I posted on yogi's Death Cross thread:
Shortly after Fri's close CNBC's Mike Santoli did a great S&P chart piece on what he called "Dark Crosses" (Death Crosses to many) including a look back at two prior, similar crosses. He showed the time it took to get back to Golden Crosses, and the depths to which the S&P dropped in between the two crosses. It does not appear that video is available (yet?) but well worth the time if/when it is located.
With all due respect to those NOT inclined to use T/A, in my 45 years of investing, I've found that NOT using T/A during times like these is akin to flying blind. Currently, T/A has allowed me to completely remove emotion, develop a strategy for re-deployment of proceeds from our March 31 sales of 50% of our stocks, and simply connect the dots, so to speak. YMMV.
No specific T/A signals lead to our March 31 SELLs of 50% of stocks on March 31. T/A is after all, large parts science and art. It is generally always a combination of chart movements and signals, and in our case, analysis and guidance of professional T/A's, that causes us to act.
BTW, my actions were fully documented on the Liberation Day thread that was started on March 31, the Monday before Liberation Day. I ended up crediting the OP for throwing us over the edge and ultimately breaking a cardinal rule of investment strategy, selling stocks off to BELOW a lifetime, minimum %.
So it was far more a combination/compilation of things:
I had been DEEPLY worried about the economic and market impacts of tariffs from whatever day (in Nov?) the buffoon-elect stated he wanted to become known as the tariff president.
I mean DEEPLY worried. To the point that we significantly reduced our port volatility at our 2024 YE review, while also reducing our stock allocation % to the minimum, lifetime level.
The chart and market action around the end of Feb/beg of March were our primary indicators. If you recall, the buffoon postponed the BIG tariff announcement 30 days from March to April.
Take a look at charts and market performance in March. During that month, Katie Stockton and the other T/A's we follow were giving guidance like (paraphrasing): 2025 will be a year that the bull market pauses at best and NADAQ and the S&P are rolling over, and a host of other analysis/guidance that was clearly pointing to our belief that this could get WAY worse before it gets ANY better.
The depths of a potential market sell off were widely being projected, with T/A's duly calc'ing lines in the sand to which respective markets could drop if the April tariffs were anything near the levels the buffoon was spewing.
We knew that a recession had not been priced in yet. We knew that market watchers were not yet even allowing a deep recession to enter the picture.
We looked at the levels to which it appeared the market could/would drop if the news was as bad or worse as what happened in early March at the 30-day postponement.
So, T/A being large part art, what we saw coming on Liberation Day was a freight train, operated by a mad man, barreling down the tracks, with our stock portfolio smack in the middle of them.
It was a SCARY looking picture and we simply BLINKED and got the hell outta the way.
The Mike Santoli analysis I referenced shows that it'll likely be ~6-9 months in a best case scenario before the 50 dMA rises back above the 200 dMA (Golden Cross).
I'll admit that I took the stance that Trump says a lot of things (often times completely contradictory themes within the same sentence). It is a stream of consciousness with no apparent editing or self correction mechanism. So I generally take the stance of watching what he does vs. says. The depth of the tariffs certainly surprised me. In the weeks leading up to the April 2 bomb, I didn't sell anything but beefed up my LS and Market Neutral holdings which has helped cushion the hit to portfolio.
S&P appears poised to regain the Fibo 50% retracement line, and may even make it's first run at the 61.8% line.
Meanwhile, here's some historical data that helps me better understand why Katie S's recurring guidance over the past month or so has included the notion of potential pause in the bull in 2025.
Bottom Line: We appear to NOT have yet priced in even a mild recession. Per the comments of a different T/A yesterday, a mild recession on the S&P would be priced in at ~4,500. (The S&P closed at 4,982.77 on Liberation Day.) Per my calc's, that estimate tracks well with the MW historical analysis.
FWIW, as I noted on other threads, I project we will be in a trading range for several months between the Lib Day low and the Buffoon BLINK Bounce high, with a strong likelihood that we will re-test the Lib Day low, and that we won't see Golden Crosses for 6-12 months.
Aside: Add a HUGE asterisk to all that given that the vast majority of the market action in the past three months has been self-induced, with wild market swings being caused daily by smoke, mirrors and WAG data.
Aside: Add a HUGE asterisk to all that given that the vast majority of the market action in the past three months has been self-induced, with wild market swings being caused daily by smoke, mirrors and WAG data.
And that is indeed the catch, isn't it? Without a market which is functioning 'normally', how accurate and effective can we expect TA (or anything) to be?!
Aside: Add a HUGE asterisk to all that given that the vast majority of the market action in the past three months has been self-induced, with wild market swings being caused daily by smoke, mirrors and WAG data.
And that is indeed the catch, isn't it? Without a market which is functioning 'normally', how accurate and effective can we expect TA (or anything) to be?!
Agreed. But, T/A has been guiding our strategical moves since Election Day and the results have been rewarding. It feels like we are all flying blind to some extent at this point, but without T/A, our port would have taken on significant damage by now. With it, we are successfully treading water with our stock exposure, and reaping the rewards of a steady interest flow from our oversized 5-yr CD ladder. And, T/A has allowed us to develop a strategical plan while effectively removing emotions from our decisions. It ain't for everyone, but as I've stated here or on other threads, it's a worthy tool always, but IMO an essential one during market drops like these.
If I may add, the prevailing T/A notion that is burning a hole in my ear? Expect rallies to be sharp and short-lived.
EDIT: S&P is currently taking a look see at the Buffoon BLINK Bounce high. Until we convincingly re-take it, the 50% Fibo retracement AND elevate to the 61.8% retracement level, it all likely adds up to an extended period of starts/stops and sideways action, with an early July (postponement) date looming.
One particular T/A from BellCurveTrading has, even in these seemingly blindfolded times, successfully projected and predicted the recent, respective index tops AND the respective index % drawdowns that we've seen to date. Pretty remarkable!
Today on CNBC he stated these levels as the likely bottoms on the respective indexes:
So, after reading and watching way more stuff than I really wanted to about this, the prevailing thinking amongst the T/A's that I've reviewed is that it appears we are headed for a recession, the S&P will see 4,500, and could go as low as 4,100.
NOT saying this will happen - just putting out there the possible LOW target.
Or confirmation could come through a retest of the market’s 52-week low of 4,982 in April, he said. Of 18 previous bear markets dating back to 1950, 13 had a double bottom kind of pattern, meaning the market low had a retest, he said, adding that that low must hold and stocks need to rally off of it.
Forgot to post this earlier. Great stuff from Katie S after the close this Monday. Critical line in the sand on S&P at 5,126. S&P Closed Monday at 5,128.20.
S&P: Introduction of a BUY level and a extremely BULLISH level.
Excerpt (BOLD added):
If SPX can keep climbing, a McMillan Volatility Band (MVB) buy signal would be generated by a close above 5,575. Even so, there is further overhead resistance, including the now-declining 200-day MA at 5,750. If SPX were to rise above 5,800, that would be extremely bullish and we would no longer consider the SPX chart bearish.
FWIW IMO, we are unlikely to achieve the 5,800 level anytime soon. YMMV.
You gotta commend market participants for trying a coupla times now, but the S&P NOT rising above the 5,500 level appears to help validate the views of many T/A's who believe it will be the upper level of the trading range for the time being.
Pretty impressive 4-day bear market rally based largely on hopes of tariff deals and an oversold condition, despite an increasingly ominous economic outlook.
That said, here's commentary on that S&P 5,500 target level again! See video at ~1:55.
Scanning the BSW thread it appears some posters are adding new money to stock allocations. We all have different strategies and goals and the markets showed signs of life last week so I get it.
If you read this thread, the Lib Day and BSW threads, you know mine. Not gonna belabor anyone and restate it, but would feel remiss if I didn’t reiterate that from a T/A perspective, extreme caution is still the dominant theme.
"Through April 28, the S&P 500 was down 7.8% since Trump’s inauguration. April 29 will be the 100th day of Trump’s presidency. The last time the stock market performed this poorly was under Nixon in 1973 when the S&P 500 tumbled nearly 10% in his first 100 days."
"History indicates that investors should expect an overall gain in stocks for the rest of Trump’s term. But market returns have been lower when stocks were down in a president’s first 100 days than when stocks were up in the first few months."
"Going back to 1949, during the seven times that markets were down in a president’s first 100 days, the average total return during their four-year term was 20.6%. When markets were up in the first 100 days, the total return averaged 53%."
Comments
Way too early for the T/A to claim victory, but he clearly has a leg up on it based on today's action. Further gains beyond yesterday's close appear improbable and a re-test of the lows looking likely at this point.
Fundamentals? Good luck discerning them during this buffoon-induced disaster
Emotions? That usually works out well, eh?
If the first one is 'yes', it's a possible investment for me and worthy of more analysis for potential new buys. A 'yes' to the second question rules it out for me.
To wit: Nike, Starbucks, Carnival Cruises, Apple, TSLA, chips, etc? No. But regulated utilities, midstream pipelines (of NG), and some pharma? Yes.
As far as T/A goes, I look at price action and briefly glance at where there's any historical 'congestion' to indicate 'support.'
The T/A provided in the link is primarily Fibo retracement stuff and gap filling, with a look back at similar scenarios and outcomes.
BTW, I wasn't clear. My question was more about index or fund/ETF level investing, but it of course also relates to indv stocks.
Forgive me if I'm missing the boat here but...
Please re-read what you posted because it's pretty confusing, at least to me, and I really like the screening (for stock purposes) and want to understand it.
To wit, there are TWO questions in your first-round screening. They're IMO opposing questions, that is, if you answer "Yes" to the first, you answer "No" to the second.
You then say, "If no..." "No" to which one?
Then for your group answers of "No" or "Yes" for the companies, which of your two questions are you answering?
I think I get it, just want to be sure.
Shortly after Fri's close CNBC's Mike Santoli did a great S&P chart piece on what he called "Dark Crosses" (Death Crosses to many) including a look back at two prior, similar crosses. He showed the time it took to get back to Golden Crosses, and the depths to which the S&P dropped in between the two crosses. It does not appear that video is available (yet?) but well worth the time if/when it is located.
With all due respect to those NOT inclined to use T/A, in my 45 years of investing, I've found that NOT using T/A during times like these is akin to flying blind. Currently, T/A has allowed me to completely remove emotion, develop a strategy for re-deployment of proceeds from our March 31 sales of 50% of our stocks, and simply connect the dots, so to speak. YMMV.
No specific T/A signals lead to our March 31 SELLs of 50% of stocks on March 31. T/A is after all, large parts science and art. It is generally always a combination of chart movements and signals, and in our case, analysis and guidance of professional T/A's, that causes us to act.
BTW, my actions were fully documented on the Liberation Day thread that was started on March 31, the Monday before Liberation Day. I ended up crediting the OP for throwing us over the edge and ultimately breaking a cardinal rule of investment strategy, selling stocks off to BELOW a lifetime, minimum %.
So it was far more a combination/compilation of things:
I had been DEEPLY worried about the economic and market impacts of tariffs from whatever day (in Nov?) the buffoon-elect stated he wanted to become known as the tariff president.
I mean DEEPLY worried. To the point that we significantly reduced our port volatility at our 2024 YE review, while also reducing our stock allocation % to the minimum, lifetime level.
The chart and market action around the end of Feb/beg of March were our primary indicators. If you recall, the buffoon postponed the BIG tariff announcement 30 days from March to April.
Take a look at charts and market performance in March. During that month, Katie Stockton and the other T/A's we follow were giving guidance like (paraphrasing):
2025 will be a year that the bull market pauses at best and NADAQ and the S&P are rolling over, and a host of other analysis/guidance that was clearly pointing to our belief that this could get WAY worse before it gets ANY better.
The depths of a potential market sell off were widely being projected, with T/A's duly calc'ing lines in the sand to which respective markets could drop if the April tariffs were anything near the levels the buffoon was spewing.
We knew that a recession had not been priced in yet. We knew that market watchers were not yet even allowing a deep recession to enter the picture.
We looked at the levels to which it appeared the market could/would drop if the news was as bad or worse as what happened in early March at the 30-day postponement.
So, T/A being large part art, what we saw coming on Liberation Day was a freight train, operated by a mad man, barreling down the tracks, with our stock portfolio smack in the middle of them.
It was a SCARY looking picture and we simply BLINKED and got the hell outta the way.
The Mike Santoli analysis I referenced shows that it'll likely be ~6-9 months in a best case scenario before the 50 dMA rises back above the 200 dMA (Golden Cross).
Here's hoping you have at least that left!
I'll admit that I took the stance that Trump says a lot of things (often times completely contradictory themes within the same sentence). It is a stream of consciousness with no apparent editing or self correction mechanism. So I generally take the stance of watching what he does vs. says. The depth of the tariffs certainly surprised me. In the weeks leading up to the April 2 bomb, I didn't sell anything but beefed up my LS and Market Neutral holdings which has helped cushion the hit to portfolio.
Meanwhile, here's some historical data that helps me better understand why Katie S's recurring guidance over the past month or so has included the notion of potential pause in the bull in 2025.
https://fortune.com/2025/04/13/trump-tariff-stock-market-losses-dow-sp500-nasdaq-breakeven-rally/
Here's a great historical look by MW at S&P drops in various prior periods, including those that did and did not end in recessions.
https://www.marketwatch.com/story/heres-how-far-the-stock-market-and-other-assets-have-gone-in-pricing-in-a-recession-according-to-deutsche-bank-baddff80?mod=home_lead
Bottom Line: We appear to NOT have yet priced in even a mild recession. Per the comments of a different T/A yesterday, a mild recession on the S&P would be priced in at ~4,500. (The S&P closed at 4,982.77 on Liberation Day.) Per my calc's, that estimate tracks well with the MW historical analysis.
FWIW, as I noted on other threads, I project we will be in a trading range for several months between the Lib Day low and the Buffoon BLINK Bounce high, with a strong likelihood that we will re-test the Lib Day low, and that we won't see Golden Crosses for 6-12 months.
Aside: Add a HUGE asterisk to all that given that the vast majority of the market action in the past three months has been self-induced, with wild market swings being caused daily by smoke, mirrors and WAG data.
If I may add, the prevailing T/A notion that is burning a hole in my ear?
Expect rallies to be sharp and short-lived.
EDIT: S&P is currently taking a look see at the Buffoon BLINK Bounce high. Until we convincingly re-take it, the 50% Fibo retracement AND elevate to the 61.8% retracement level, it all likely adds up to an extended period of starts/stops and sideways action, with an early July (postponement) date looming.
One particular T/A from BellCurveTrading has, even in these seemingly blindfolded times, successfully projected and predicted the recent, respective index tops AND the respective index % drawdowns that we've seen to date. Pretty remarkable!
Today on CNBC he stated these levels as the likely bottoms on the respective indexes:
S&P: 4,500-4,100
N100: 16,000-14,500
Dow: 35,000-33,000
So, after reading and watching way more stuff than I really wanted to about this, the prevailing thinking amongst the T/A's that I've reviewed is that it appears we are headed for a recession, the S&P will see 4,500, and could go as low as 4,100.
NOT saying this will happen - just putting out there the possible LOW target.
Take it or leave it. YMMV.
Excerpt (BOLD added):
Or confirmation could come through a retest of the market’s 52-week low of 4,982 in April, he said. Of 18 previous bear markets dating back to 1950, 13 had a double bottom kind of pattern, meaning the market low had a retest, he said, adding that that low must hold and stocks need to rally off of it.
Critical line in the sand on S&P at 5,126. S&P Closed Monday at 5,128.20.
https://www.cnbc.com/video/2025/04/21/fairleads-katie-stockton-on-the-technicals-surrounding-the-market-sell-off.html
https://www.marketwatch.com/story/the-stock-market-is-looking-oversold-as-earnings-season-gets-underway-e699e2f0?mod=home_invest
S&P: Introduction of a BUY level and a extremely BULLISH level.
Excerpt (BOLD added):
If SPX can keep climbing, a McMillan Volatility Band (MVB) buy signal would be generated by a close above 5,575. Even so, there is further overhead resistance, including the now-declining 200-day MA at 5,750. If SPX were to rise above 5,800, that would be extremely bullish and we would no longer consider the SPX chart bearish.
FWIW IMO, we are unlikely to achieve the 5,800 level anytime soon. YMMV.
https://stockcharts.com/h-sc/ui?s=$SPX&p=D&b=3&g=0&id=p21909272695&a=412512122&listNum=86
That said, here's commentary on that S&P 5,500 target level again! See video at ~1:55.
https://www.cnbc.com/video/2025/04/25/were-getting-close-to-a-technical-confirmation-of-a-bottom-says-3fourteen-researchs-warren-pies.html
Art Cashin (RIP): "I learned long ago that hope is not a viable investment strategy."
YMMV.
--------------------
Aside: Scoring TOT's Term 2 S&P performance at home:
Four UP weeks
Ten DOWN weeks
PTD: -7.86%
If you read this thread, the Lib Day and BSW threads, you know mine. Not gonna belabor anyone and restate it, but would feel remiss if I didn’t reiterate that from a T/A perspective, extreme caution is still the dominant theme.
YMMV.
https://www.barrons.com/articles/trump-first-100-days-stock-market-0043abbe?mod=hp_SP_A_2_1
April 29 will be the 100th day of Trump’s presidency.
The last time the stock market performed this poorly was under Nixon in 1973
when the S&P 500 tumbled nearly 10% in his first 100 days."
"History indicates that investors should expect an overall gain in stocks for the rest of Trump’s term.
But market returns have been lower when stocks were down in a president’s first 100 days
than when stocks were up in the first few months."
"Going back to 1949, during the seven times that markets were down in a president’s first 100 days,
the average total return during their four-year term was 20.6%.
When markets were up in the first 100 days, the total return averaged 53%."
Here's a link for those who don't have a Barron's subscription.
https://www.msn.com/en-us/money/savingandinvesting/trump-s-first-100-days-were-the-worst-for-stocks-since-nixon-what-history-says-happens-next/ar-AA1DOkSF