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Friday, September 30, 2022

Looks Like I Finally Got It Wrong - this time - What Was I Thinking?!

Looks Like I Finally Got It Wrong - What Was I Thinking?! 

It's been quite a while since I got it wrong, and I've still been mostly right, when it comes to the bearish reversal in commodities, energy, and even when I said that the market could not continue to sell off on a low $VIX, and it should be obvious to everybody by now, that we're not going to see another 20% downside, on a low (below 30) $VIX! I even got gold right, when I got out at the top, and removed the gold page, I had created. Not an easy thing to do, to get bullish, and then get bearish, and stay bearish, even as currencies are collapsing, as I predicted back in 

Market Update 7/15/22 Currency Collapse Likely? Red Flags! Gold the next safety trade?

So, I'd still argue that I've been mostly right, over the past year, but being right all the time, would lead to boredom, and you don't learn anything being right all the time! 
I've been consistently wrong on a couple, actually 3, things, which come to mind. 

Financials, Tech, and another important one, I'll reveal shortly

Here's where I got it wrong on Sept 22nd, and again, last week: 

1. On the 22nd, I was seeing what looked like a bullish reversal, and energy charts that could not be broken 

Market Update 9/2/22 - Taking a Closer Look At Yesterday's Bullish Reversal

Soon after.... those Energy ETF's broke, and that turned out to be good thing, for me, but had I been long, I'd still be down, even after this weeks rally in energy! 

2.  Just last week, I was still seeing a bullish set-up - in the broader market - and an upturned channel. Turned out to be something else, which I'll get into shortly.   

3. I also got tech wrong, and even yesterday, Tech continues to make lower recent lows. 

This tweet from Sept 15th 


This all goes back to my misreading of the tech sector, and more importantly the $DAX 


Sure, I could blame the selling ahead of the bombing of the Nord Stream Pipe Line, or the fact that the market breadth is shallow, or that this pullback has been harder to predict than most, or that patterns don't work as well as they did, before everyone started trading moving averages, which is all true.

A Difficult pattern to predict   

This is especially true, if we are trading in wave "E" - which is a wild card 

$INDU - wave E can truncate or overshoot 

Not your typical chart pattern, and that's why you still see 99% of technicians still trying to draw parallel channels on the charts. Looks like a descending megaphone pattern to me!  

Getting back to the $DAX, I revealed my updated $DAX chart yesterday, and even shared it with a couple well known German banks. I'm hoping to get an invite to Germany, or at least a referral, but let's face it, I'm not a good fit for corporate life!  

$DAX - looks like a broadening pattern - technically a common Expanded flat Pattern, where wave B comes to an end below the start of wave A 

However, when you look at a long term $DAX chart, it resembles another down-turned triangle pattern

BUT - and that's a big but, I believe we're not trading in wave E. I think some incredibly smart people are trading it, as if it's wave E, but in fact this is a minor wave b. or some other complicated wave (like (X) of (D), as I'd pointed to in previous updates. 

A couple more things: 

Why are US equities being sold so aggressively, when Canada isn't even trading at the lows of the year? 

$TSX - looks like it's also trading in Wave B. 

Still looking for a face melting rally, even if the market continues to trade into an oversold condition - going into next week. 

Take Care, AA 

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