AZL General Discussion, page-12400

Make or break of rebounce tonight?

Yes AZL lost 4 pips to finish on 7.8c. Our volume was lower side, just over 13.6m shares traded.

ASX Li stocks were flat for the day. Couple of stocks had a good gain, so overal across 54 stocks I track, there was no gain or loss.

Overnight US Li stocks went soft along with general market and lost an average of 4%. That way we did better.

What next -
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Yesterday I had mentioned that one of the characteristics of bear market rally is a big drop the next day. And we got that, most indices losing between 2 to 3%. ASX did fell but not as much, just over 1%.

I have been talking about two scenario playing out for last couple of days. Both are still in play. Just to recap, these were (details in my previous day post):

Scenario 1 - rebounce from June lows (early 3600/late 3500) for October rally, then a drop in Oct, then final rally
Scenario 2 - rebounce from SP 500 level of 3500, so drop more now till 3500, then October rally, then a drop in Oct, then final rally

This is if we expect a rebounce and a good rally towards next few months. Alternate (Scenario 3) is we go down to 3100 to 3400 level or maybe lower.
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In the last 2 days, we had one big green and another big red, we are still where we were couple of days back when I wrote these scenarios, hence it still stands. Scenario 1 is double bottom W pattern.

Of what I have read and analysed, tonight is the crucial day where we will see the Scenario play out and it could be any of the above 3. There is an expectation that we may get a clear signal tonight on what direction market is going in short term.

At this stage Scenario 1 is the most likely. Previously expectation was we may not go below June bottom, but we already have. But it still falls within the range. There is a chance a drop to 3570/3580 may happen or we just go from here. If it does not play this way, then it becomes very uncertain and may require a strategy change for me.

Tonight is crucial PCE figures. When we got the data in August, it was not favourable. We had a big drop that day and for next few days. I am hoping we don't see that again. PCE is important as Fed uses this for their monetary policy and interest rates.

Personally, till the Scenario 1 is still viable, I am hopeful. We did not have a good day yesterday night and today in ASX, but I am staying put for now. Added another 10% today, so have now used 70% of my funds. (Please dyor)

So what will happen tonight?
US Futures flat. Asian markets largely green. VIX at 31.84 so getting into danger zone. Cryptos cautious and steady - Bitcoin at 19.5k, they are not in panic.
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I have been asked many times why I write about Crypto - I don't trade them but in past they have provided clear directions where stocks are headed, not always but many times. Another indirect benefit for me is that it provides an excuse for people who want to bash me. As we know we can't make everyone happy. They will not contribute themselves, and people like me who take some effort to contribute something, good or bad, they see my writing as a danger to themselves and other people. I know they may not be analytically advanced to provide good arguments why I should not write. Cryptos come in very handy. In nearly all cases where they have responded to belittle me, a common them would be - "See this guy who makes no sense, just talks about Cryptos". That is enough for them and they feel content that they have made a contribution to society. It comes in handy, indirectly.

Tonight PCE data before we open. Tonight is not predictable because its based on an event - PCE data. It may be like a toss. We can only hope that we get a bounce back tonight. Will that happen? Lets hope so. Enjoy your weekend and all the best.