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Thursday, April 20, 2023

Looks Like I Got It Wrong Again

 Looks Like I Got It Wrong Again 

I was thumbing through some super-long term chart views this morning - as I continue to prepare for the next market correction - and I found this long term prediction from earlier in the year. 

$COMPQ (Nasdaq) - see the red arrow. I was obviously expecting a rip your face off rally - in the Nasdaq - after all the selling we saw last year, yet all we've seen so far is continued weakness.  

Sure, we saw some money put to work in the tech sector in Q1 - and much of that was fueled by the rally in China - but nothing like I had imagined....

Also see the massive increase in volume on the chart, starting around the time of the covid bailouts.
I always wondered what that was, and I have to attribute it to money creation. A mountain of money.  

Also see the decrease in volume, at the start of 2020, as the market was being sold ahead of the release of the virus, while the kleptocracy was reporting that the market had broken out to new all time highs.

‘There will be a challenge to the coming administration in the arena of infectious diseases.’ — Watch Dr. Anthony Fauci predict a pandemic under the Trump admin back in 2017.

Getting back to the current market action in 2023 

If you look at the above chart, you can't even find a pattern... because we're only in the second, or 3rd inning...

Even yesterday I found myself charting long after the closing bell, searching for a pattern on this index. 


Pull up a DCS view of a 3 year chart of the Wilshire 5000 $WLSH 
Search for patterns, trends, channels, and the like. If you know advanced Elliott Wave Theory, you can attempt to try to apply that as well.  

I challenge you to not only find the range the broader market is trading in, but then try to apply that to the $SPX, and the Nasdaq. 

If you can find the pattern, then more power to you, when attempting to trade it, over the rest of year, but if you are still having trouble finding the range (and there is a clue...), then you are better off trading a practice account, rather than with real money.

I'm not even going to provide you with any help... because it's better to teach a man how to fish, than to give him free fish.   
This is how I learned: 

First, I learned all I could as far as classic technical charting, from every reputable source I could find, but I also looked at most of it, with a discerning eye.  

Second, once I learned how to chart like a pro, I relied on little outside influence, as I found it tended to skew my analysis. Today, I can easily look at someone else's work and totally discount it, but when you're still inexperienced, it's easy to allow yourself to be swayed by outside opinion. 

Practice proper money management, in fact don't trade real money, until you have more experience. 

In the first 12 years of trading, I blew up at least 3 trading accounts, one of which wasn't even mine - and luckily they were all rather small - between $500 - $5000. This was a great learning experience, and a real bargain. 

Don't expect to be able to trade markets successfully until you have at least a few years experience under your belt. 

Today's trade 

We continue to see mixed markets as I predicted last week. We even saw Apple driven up, as Netflix sold off, confirming yesterday's prediction.... 

I think stocks could continue to trade in a range for another week, or 2, looking at the Dow chart.

$INDU - breaks out. Continues to hold above support. 

Good Luck, AA

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