With recession fears in play, even a one day bounce cannot sustain as Dow futures looking ugly, down 430pts at this point. AUD falling below 69c is an indication of a major Risk Off. More notably, commodities are falling sharply, Dr Copper has broken the $4 mark and down to $3.90 for a 3.36% decline, and Oil has dropped as low as US102+ and appears to have broken through its upward trajectory line with XLE futures now down 3.8% (after the 5% rise yesterday).
A day late can be a difference to a large position.
The problem with technical analysis waiting for trend violation is that you start to sell only after the confirmation and that can be typically 20% lower. But if you act before the masses and take profits while the going is good and knowing what is upcoming [oil/commodity traders selling out upon recession/demand destruction narrative], you could have averted the correction.
Listening and staying tuned to the narrative has been the way I approached it, not waiting for the narrative to permeate into mainstream, that is like starting to queue for toilet paper when the word is out that there is a critical shortage.
Get this, commodity stocks correction (or further correction) is unlikely to correlate proportionately to the movement in the S&P500. It could get uglier because it had to correct more after a resounding rally earlier on (peaking in April 22).
Even Gold is getting sold down to $1825 and $1815 must hold tonight , otherwise $1800 test coming up.
The early bird catches the worm. It is no longer early but still earlier.
