When Is The Market Bearish?
The market is not bearish until it moves into a downtrend. Is that on its way? When will the market be bearish? When will the market be in a downtrend? I watch the QQQ and SPY indexes. So let’s focus today on just the spy.
Based on the current chart of the spy today, the spy will be in a downtrend if it gaps under $180 or if we trade significantly on a live trading day under $180, but it is preferable if we would actually gap under $180 and if we do then we will be in a confirmed downtrend in the spy.
We are nowhere near that number not even close.
Could it happen in 2017? Yes.
Do I think it is likely to happen? No.
The spy sold off in one day in a gap down on 5/17/17 and was immediately reversed in just two trading days. This is not a sign of bearishness-this is a sign of bullishness.
I do not think that the trend of the overall market will change anytime soon from bullish to bearish- although let me make it clear it could.
But one of the biggest reasons I don’t think that will happen is because if the market really wanted to turn it would have done it in the summer of 2015.
In the summer of 2015, the SPY had a big gap down day to begin the trading week on august 24th 2015 and it opened and swooshed. Then the market negated the swoosh! I’ve never seen this happen in the spy in 8 years of trading.
What does this mean? It means essentially that the market had a huge institutional sell-off, and then had huge institutional buying! The market has rallied ever since then.
If we break that level in the “SPY” we will have gone from bullish to bearish. These numbers could change if we continue to trade higher in 1-5 years. However, for now, those are the current technical price levels.
The one interesting fact many people don’t know unless they short almost every day like me- is that bearish moves happen very fast and they can happen out of nowhere. In other words, if the market wants to drop and turn and change trend it can do it in no time flat, just like stocks sometimes do.
Panic or selling action comes in quickly.
The bearish move that happened on May 17th, 2017 was just a brief sell-off. It takes a lot for something to completely change trends, not just one day of trading unless it is significant in price.
So where do we go from here? We will wait and see. I watch it and read each gap every day and call the market.
The market is challenging to call accurately daily. I will say a do a very good job at it. I am accurate in predicting the market most days. Although some days are easier to read than others. The way I accurately read trends and change of trends is through my analysis of gaps. I read gaps and that is how I make all my predictions like I’ve been doing to call the spy higher.
We are not bearish. We are still in an uptrend as of now. I know people have missed this bullish move and are wanting to badly to short the market. However, if you want to make money consistently trading you need to go with the trend. It is not too late to go long strong stocks or the market. Don’t play against the trend if you want to make money. Play with the trend of the stock or index you are trading if you want to be consistently profitable.
Good luck with your trading!