Is The 2019 Stock Market Crash Over? Or Will The Bear Market Continue?

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Get rid of your trading FOMO with our free guide: https://macro-ops.com/fomo/

Learn more about why emerging markets are a bad trade here: https://macro-ops.com/emerging-markets-dead-money-trade/

In this video we’ll do a quick market review to see whether we’re headed higher from here in stocks or if the bear is still creeping behind the corner.

The market is battling through the major supply overhang (red zone) that I pointed out a few weeks ago. I’d expect a selloff from these levels over the next few weeks. This bounce is technically overextended (price is near the upper Bollinger Band) and one more good washout would really set the stage (both from a technical and sentiment point of view) for another major leg higher.

Of course, we don’t need to see a selloff. We could see persistent strength and have the market move higher from here. But, I believe it’s odds on we see a reversal before the market makes another major move.

The market has so far, though, given us a number of things to be optimistic about. Both credit and Cyclical vs Defensives have been confirming this rally; which is just the type of action we need to see in order for a significant bottom to be in place.

And various breadth indicators are showing extremely large buying pressure coming into the market. My longer-term breadth indicator is moving in the right direction.

And then there’s this via Sentiment Trader from one of their latest reports.

Starting on January 4, we’ve spent quite a bit of time looking at the thrust in buying pressure. It was extreme and wide-spread…and hasn’t stopped. From several different viewpoints, the cluster of up days over the past three weeks has been extraordinary. There is always the risk that this time is different due to changes in market structure, a concern that will probably never go away. If we take the readings we’re seeing at face value, though, then the past three weeks have been truly historic.

The 3-week average of the Up Volume Ratio has gone from below 35% to above 65% in less than a month. Going back to 1940, this has only happened twice before, shown in the chart below. Both of the others triggered after approximately two-year declines of just under 30%, so quite a bit more extended than our current one. What’s remarkable is that both also kicked off major bull markets that went essentially straight up for the next 6 months, at least. As stocks continue to ignore any short-term signs of exhaustion here, these two precedents should at least be considered.

As always, stay Fallible out there investors!

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***All content, opinions, and commentary by Fallible is intended for general information and educational purposes only, NOT INVESTMENT ADVICE.

Comments

Fallible Financial Entertainment says:

Get rid of your trading FOMO with our free guide: https://macro-ops.com/fomo/

Learn more about why emerging markets are a bad trade here: https://macro-ops.com/emerging-markets-dead-money-trade/
Also, it looks like XLNX is one of those best case situations where the stock keeps shooting up after earnings.

Andy Braun says:

Liked the idea about the retail investor on how they invest.

kwaku as says:

team fallible!

David C says:

Awesome work sir. Keep up the good work. 9.9/10

Ben Brewer says:

Dude you got stopped out of your Tesla at a potential bottom….you should never put a stop loss on what could be major support because you can get closed out right before a rally…this trading 101….

prashanthigirl says:

Awesome as usual! 👊

Don Juan says:

https://threadreaderapp.com/thread/1089266608068014080.html
gonna get a Monster run up After crash and FED starts hyper QE on steroids, IMO

Barlo Brando says:

your room looks scary,i worry about you:)

JKJUNIOR95 says:

Do you have a job other than YouTube?

JKJUNIOR95 says:

What if the market is going up because the fed is going to stop raising rates they’re halting quantitative tightening and going to cut rates in 2020 doesn’t that translate to a higher market?

Tibor Z says:

Lower for longer. Because I am a perma-bear. Because Druckenmiller said it's a bear market. Because of valuations. Because of the length of this current cycle. Because of DJIA/Gold ratio. Because the FED raising rates. Because of QT. And at last but not least because all indicators were maxed out including with stimulus tax cuts what created a huge budget deficit. But that's my humble opinion and I am usually wrong!

Andi S says:

This week earning is huge to decide the direction, not sure which direction, but it will be volatile for sure.

TBenn32 says:

Great video! Appreciate the info. Very useful!

Cyberworld 7 - Stock Market Millionaire says:

I said Donald trump save the market a video a while back

Learning to Compound says:

Am buying the TSLA dip 🙃

Dflow8 says:

Been waiting for this!

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