Bonds are crashing. Will stonks follow? My answer to that question since I began forecasting a bond crash months ago has been, Yes.
The question is when.
That I can’t answer, which is why I do TA every day. I’m always looking for those signs of trend change.
Last week I wasn’t getting them. I doubted that the selloff would stick, so with my weekly chart picks for Technical Trader subscribers, I ignored the many stonks with sell signals from the screens, added no shorts, and kept adding longs. I did so because the sell signals were virtually universally in the context of uptrends. That usually means you get a short pullback, then the BTFD crowd comes in and the rallies resume.
Which is exactly what happens. I’ll short em, when those uptrends have built top patterns. Before that, trying to pick exact tops is a fools errand. OK, I’m a fool, but I’m lazy. I don’t like to do errands.
At this point, my decision to avoid shorts and add longs looks to have been the correct judgement and strategy. Many of the 14 longs that I added to the chart pick list two weeks ago, and the 5 more last week did get stopped out in the selloff. But those that have remained are running, and have made up for the small stopout losses.
I’m definitely on tenterhooks here, however. I’ve given all of the picks simple trailing stop formulas raising the stops by a fixed amount each day, following the trendlines upward. A hard down day would take most of them out with nice profits. But if the market keeps running, we stay in and ride the trend, until it does break.
As a young man looking to build my fortune for a wealthy retirement****,
***Attention new guests. This is a SARCASM ALERT. Repeat. This is a SARCASM ALERT.
I have been using the daily technical screens for my own trading account. Early yesterday, seeing opportunity, as a new acolyte of Ron Germy Segal, of the the Whoreton School, at the U of P, I built a broadly diversified portfolio of STONKS FOR THE LONG HOLE.
They ended the day nicely profitable. I am nervous as shit about it. But, like my underwear, I don’t want my stops too tight, either. You need to give the things room to breathe, both in your underwear, and your stonks portfolio.
At least for now. The 5 day cycle projection yesterday was 3945-50. That has now risen to 3970-75.
The measured move target of the inverse head and shoulders breakout was also 3975. Do I think we’ll get there? Well, I hate to say it, but since I’m holding only longs, I hope so.
But alas, hope is the enema of the trader.
We know what comes after the enema.
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