Interesting....That's pretty much what I do when I day trade, but with a lot less technicality. I look at US lithium, overall US markets, general sentiment and how Oz stocks are trending and lithium sentiment. I work on percentage possibilities and have my 'catch' trades if it falls further than expected with an aim of averaging out a lower price. The main rule I try to stick with is to only day trade so as not to be caught out. This sometimes means taking a loss sometimes to trade another day. It also means sometimes on missing out on gains only obtained in a couple of days holding sometimes, but it's a safe strategy.
I am not touching anything atm, although I was thinking about a $8.60 buy today which it didn't quite hit. The opening today was ridiculous and if it doesn't get low enough by 11.00 to 12.00pm, I often bail. I like to do my trades within 10 to 30 minutes.
A quick note on not trading atm: I have been waiting a long time for a major market correction. Since 2008 the US markets have been propped up by stimulus when it should have corrected back then! Since Covid and March 2020, the amount of stimulus has been more that the 2008 to 2020 or 2019 period which translates to economic insanity. If the market is so over stimulated (bubbly) (we should all know Buffet's overall market worth compared to GDP indicator) then it stands to reason.....and more so than in any other time in history, that we should have a major pull back. Being so much of a bubble now, well, it could be a lot bigger than most expect.
So to think that short term, Russia may not invade the Ukraine and everyone will get used to inflation etc. etc. is all fair enough, but atm we are at the turning point imo. The Fed is saying it will ease stimulus, bond buying and actually wants to decrease debt I think?! This is the very thing keeping the US economy and others from collapse and looking like markets are ok, when in actual fact, it is all false. (Also, lithium shares GXY and others, often peak from mid Jan to late and then fall away) Weeks ago Darkstone I think you posted your long term prediction, chart wise, for PLS was a peak as they just hit and then a big pull back. I won't look it up, but I think it was between 20 and 40%
Ok, right now, the SPX, Dow Jones, Nasdaq and Russell 2000 are all under their 200 day moving average. If all keep going down and the futures right now look quite red, then what? Usually when support levels start breaking and we look for the next, and then the next etc. eventually the fall is almost self fulfilling and panic selling kicks in. So what I'm saying is that I don't believe this is short term. Yes, we might and probably will get a dead cat bounce here and there, but to coin a phrase, it's rotten to the core.
Here's a good excercise: Every month on the SPX, on the first day and the third Friday of the month, draw parallel lines on the top and bottom of the days trading range. After this, any days closing in range means neutral. Any close above or below and then backed up by a secondary close will indicate whether the market is in bearish or bullish mode. This is at least 92% accurate.
I don't know when a major correction (notice I'm avoiding saying crash a lot) will happen, I just know it will because history tells us so. Since April last year I have been taking call options on the TZA. This is a 3 x opposite movement reflection of the IWM which is a reflection of the Russell 2000. I have settled on this as opposed to the Nasdaq for example as the Russell 2000 is made up of 2000 small cap companies in the US (with all their head offices in the US) and is more economically sensitive to adverse economics. Up until a week or 2 ago I was holding my own or slightly in front by selling on highs to take out more options 2 to 5 months in the future as options value gets eaten away by time also. Now I have options till mid April. All my friends and traders I know have asked me when I think crunch time might be. I have replied in the last few weeks or month that I think February we might have a crash, but possibly any time from mid January. (Being open here Darkstone in appreciation of your openness)
So I'm probably the one you all don't want to believe....and yes I did just rock into town like the "circus" because I don't often post, but this is, I believe a crucial time and we should be careful. I have been preparing since the start of last year and even earlier.
Hey, there is a chance that everything is different this time as is said.....BUT history says it's not true and I would like you all to keep it in mind. Keep some money to buy at the real bottom (a price you don't think it will reach. I said $6 to $7). My SMSF is bursting just waiting! If I'm wrong, I will admit it, but I also will still be fine because as I've said, I've taken a lot of profit after being a holder since 2012 and I still hold enough to make more gains.
This morning was a great time to sell on a break out which didn't seem to fit (for short term traders...good work Darkstone) and there will be more. Ah, there you have it, my thoughts and strategies. I'm by no means a great trader or go to extreme research (thanks everyone on HC for giving me constant leads over the years) but I have been in markets a long time.
I said this the other day: I want a market crash to happen and I say this without malice to others or wishing pain for any of you guys. We need a complete reset and get back to normality. Economically speaking, the whole world is out of whack and the real estate market is off it's head! Australia is one of the worst in the world. I want a crash so we can value companies in real terms again like real profit and growth, not buy back prop ups etc. I want real estate to come back to an accessible thing for the average person and not just the rich kids with support!! BTW real estate generally follows market crashes, but much slower.
Time frames: So most damage is done in the first 2 months or so and then may draw out over a few more or longer depending. Real estate follows, but might take up to a year or 2, Hence the other day I said I want my kids to be able to buy a property by the end of 2023.
Shite, will I be right or wrong. I have certainly left myself open here. I'm sure a lot will scoff and I'd love GCar's log chart to keep going, but....?!?!
I think I will almost always hold some core shares in (now) AKE because the future is bright, it just might be set from another level.
Who am I..... ;-)
Expand
