Ian Woodward's Investing BlogStock Market: Floodgates Opened Wide!
After a week of turmoil both up and down, today’s action has given control to the Bears, but with the craziness of the Market we shall see where we go next:
Yes. most of you understand that Emotion Rules the Market, and the pictures I use to define Greed on the one hand and Fear on the other, but as you well know when the floodgates open to the downside, your Nest Egg gets killed:
It goes without saying that I have built much of my process based on John Bollinger, and it didn’t take me long to see that the big pay dirt is at the Extremes of Fear and Greed. We know how to perform in between, but the stomachs come into play at the extremes , and I hope I help you most at such extremes:
A year ago, John Bollinger reminded me at times like this when markets get Overbought or Oversold they can remain that way for long periods of time before they break or rise again, and he calls them Fat Tails…so I fed him this as my version with tongue in cheek!
We have not seen a Market like this and short term Players can enjoy the volatility of a totally news-driven Market:
Let me show you the Explosive Growth we saw in the Indexes just seven days ago and then what transpired since:
Just focus on the columns I have highlighted to get the pulse of the Market in two minutes. Here is Five days later:
The very next day, the Indexes bounced back and things were looking better for the rally continuing:
…And here we are one day later and completely down in the Doldrums again:
Net-net, this market is in total oscillation and wildly so…results not seen in 13 Years of History; this speaks volumes:
…And here is Grandma’s Pies just back to two days ago:
…And finally, here is the spaghetti of the A+B vs. D+E scenario…back to Stalemate:
Keep your Powder Dry and the Best of Luck,
Ian
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