Loading ...It Is All Part of The Set Up – Part2
If you have been following along, my Two Themes for 2022 have had one part, spot on and one part wrong. The NASDAQ 100 tanked for the first three weeks of this new year and bottomed, as called for last Monday around Noon. The dead cat bounce really got going on Friday and is about to have it’s explosive move, probably tomorrow. The NDX will spike but the index that should draw the most attention is the DJIA. I look for an over 1,000 point move and possibly all in one day, to grab the most headlines. If we get that tomorrow I would lighten up on long positions taken in the last week to play this bounce. It won’t necessarily top tomorrow but given that we have started a bear market, if we get the kind of rally I am looking for I wouldn’t recommend sticking around for too long. If the market goes up in more measured steps, then it probably will last the rest of the week? Either way don’t overstay you’re welcome on the long side.
Sir Chartmaster
Thank you for your views on what to expect.
I must confess, I do not have a feel for the market at large in the short term … the tipping point.
I am curious if you follow Dave Hunters views?
He thinks we will get a massive melt up into March followed by the beginning of a fairly significant drop.
I think 40% melt up and 80% crash.
I believe Michael Pento is forecasting the wheels coming off in Q2 as well.
Cheers
Rob
Sir Rob, I don’t follow either. I have seen various headlines and quotes about “one more melt-up” not sure from where. If you are talking about a 40% retracement of the declines, I guess that’s possible if it is from last Monday’s lows, especially for the DJIA. Fits in with what I have laid out. Always possible we hold up until March and they use a 1/4 hike by the FED as excuse for next leg down. I think the oversold will be worked off before that and we will have rolled over by then.
Again very interesting views.
I have seen two schools of thought.
1. There are those that think this will be a quick and decisive crash (12/18 mths – 80%).
They say everything, incl PM’s will get smashed.
PM’s will break out upwards quickly. This sort of my thinking.
2. Others say, this pop is being engineered by the FED. It will be slow and arduous (10 yrs long 80%).
The argument is that it won’t impact PM’s much and that PM’s will do very well.
I guess time will tell. Maybe the truth lies in a Hybrid of the two.