Stock Market-Long Term Bull Trend Has Broken-How Can It Turn Around & Resume? Must Read!
October 8 2022 Option Professor Opinions & Observations
Hello Everyone…This week we got more evidence that the consumer is employed, has money, is spending and it will take a lot more than a 3% Fed Funds rate to slow this thing after such an expansion of money and credit coming into this year. We told you in the QUICK ALERT that SPX 3810 was the last moving average we use (the 200 week average is at SPX 3595) and that broke last month. We said that would be the logical place for RESISTANCE (failure) which was EXACTLY what happened. This follows our calls this year that when the VIX hits 35+ and we are way UNDER our moving averages a ferocious rally may lie ahead (also EXACTLY what happened.) Earlier this year; We also said that the SPX had RESISTANCE (failure) at SPX 4540-4350-4150 based on moving averages and Fibonacci retracements (Very ACCURATE data).
So ; Why Are You Waiting to Contact Us at [email protected] or Call Us at 702-873-8038?? Get PDF Reports-How to Protect Portfolios- PDF Reports on Market Direction- 1 on 1 Review of Markets
The title of this piece is that the Stock Market Long Term Uptrend has broken and what is needed to get back on the horse (Does the Fed want you back on the horse?). OUR DATA tells us that the SPX 3804-4143 and 4176 needs to be EXCEEDED to occur to get month over month statements to not look like a loss parades. The QQQ (Tech-Growth) needs to see 301-333-326 EXCEEDED to turn that ship around. Regarding the IWM (small caps); we need to see 185-192-204 EXCEEDED to increase odds of a bull call.
What could cause these turnaround to occur? TRUTHFULLY…Who Knows??… Our guess…the Dollar will need to turn…The 10 Yr Treasury Yield rise will have to abate….and BOTH those markets are VERY overbought so we believe it will happen eventually. Why Guess?? With big money…wait for price evidence The SHOW ME STATE (Missouri) philosophy has kept us from chasing bear market rallies & losing money
Why are prices of markets having such a hard time sustaining advances?? We believe there are 2 SIMPLE answers to that question. #1 The M2 Money Supply has been COLLAPSING ( in fact Global Currency growth way down). In fact; the M2 Money Growth is UNDER the inflation rate & some call this the DANGER Zone where sometimes financial accidents can occur. This means LIQUIDITY is WAY Down (BOE) #2 The Fed is HIKING & DOING QT in an attempt to undo the RIDICULOUS overaction ($9 Trill) to COVID.
Markets don’t go straight up or down & people don’t get hit by the train they see coming at them. NEXT WEEK; we get EARNINGS from the banks INFLATION NEWS (PPI CPI) and CONSUMER (retail sales) Plenty of Geo-political hot spots…Liquidity Risks…General Chaos waiting in the wings so Caveat Emptor
We told readers for years that a 0-24 month ladder in Treasuries is a way to have relative stability of principal and rising income to RIDE OUT this Asset Deflation. OF COURSE…who but us have suggested that idea….EXPENSIVE Newsletters that tout 100’s of stocks an the cherry pick winners?? How about investment advisors & firms who charge 2% annually to “manage” your account? Let’s get real……There are no fees to buy Treasuries so who’s going to push them…in reminds us of water, vegetables, fish and $10 bucks a month gym memberships….some of the best things you can do in life really don’t cost much
Can OUR information can Help YOU? Email Us at [email protected] or Call Us 702-873-8038
Talk With You Soon,
The Option Professor
REMEMBER All investing involves risk of loss and it is not right for everyone. CONSULT YOUR BROKERGE FIRM/broker to determine your own risk tolerance and suitability. Past performance is not indicative of future results. Information and opinions are provided for informational purposes only It is NOT advice.