No one knows what will happen, anyone claiming otherwise is full of crap. We can rally just as likely as we can continue to tank or go sideways, this is why the market is so hard to master. And people make it even harder by trying to predict it.
90% on this thread are expecting further weakness AFTER the market has already made a big move down. This relates to the famous 3rd Law. The weekly charts look pretty bullish to me, the recent selloff nothing more than a small retracement in the overall uptrend. Weekend papers will be full of doom and gloom. Buying the market will be a hard trade. Add all of those together and the market looks like it should be bought, or at least covered aggressively if already short.
This is a plausible scenario, AK Of course we can look at it from a historic perspective. I need some help with this. I'll start with my guesstimates: Average Bull market last 20 years: 4 years average bear market: 2 years so we're at 3 years into this bull run so 1 year to go
Those were my conclusions as well. I think once this downtrend ends, a monstrous bull cycle will begin. I read from experienced traders that the chances of breaching last years low this year are non existant, these are very good traders, we'll see what happens.
the only thing against a bullish scenario is that the support/ buying have been dismal the last weeks.
people always want to play smart. the market is so obvious in the down trend (daily, not intra-day), you do not need a ema tell you. ema is delayed. last week I made good money on crude 87/85 put, I know I may be wrong, but feel there is good odd there. crude is way below 50ema, to me, very obvious it is a sell. trend is my friend. bear market has sharp quick rebound, that is typical. but you do not need bet on it. 90% people lose is because they do not follow the market, they try to be smart, they do not believe what they see, they believe their inner thinking. the thinking in your mind is not reality world. EMA is a delay signal, it is very reliable. most people do not know how to use it. when market is under 50days ema, do not mean sell on the market, just mean you need a sell strategy, for example, when it bounces to resistance, sell, or a bounce reversal sell, those are not counter-trend or fading. most people think sell into a bounce of a down trend is a phading, that is not. since you are following the big trend. counter-trend the small trend, big money printed for you. this strategy works well also in a range-band.
How can anyone say the weekly charts look good? XLF was in a bear flag, IWM broke support, IYR broke support, it all looks bad. If we look at sentiment, there isn't much negative sentiment. There's been no heavy volume on this decline. Vix is stlil at normal levels. Not much heavy shorting, even the banks are at very low short levels. Even the savvy traders at ET aren't expecting much of a decline, if any. If the spy were a stock, would you look at the chart and say, that looks good! No of course not. MOre pain to come. If we open higher on Monday, massively more pain to come.
I would have to guess that the people making these predictions are discretionary traders because systematic traders only care about their rules and following them. A systematic trader might say that the market is configured in such a way as to make a crash more likely than it is at other times, but, if their system is a good one, I doubt that it would ever put a crash at a high probability, precisely because they are so rare. There have been, what, 10 great crashes in US market history (just a guesstimate)? That means the odds are 10 divided by however many days of trading there have been in US market history. At those odds, starting a thread about a crash is 99.999% likely to be a waste of bandwidth. You might, given the past month-plus of market declines, be able to construct a context where the likelihood of a crash goes up to 1%, e.g. a 10% decline in a month after a 100%+ run-up in 3 years on 33% less volume than the prior 3 years, etc., etc., but even then you're going out on a limb with very little data to support the hypothesis of a crash.