We nailed the market direction (pullback) again last week, continuing our hot streak, which several AIs have scored my weekly market reviews at 9/10 over the last two years, against an industry average of 50-60%.
It’s a big part of your routine that only takes seconds if you know how. And it’s one of topics we’ll cover in Mayakoba.
Once you nail market direction, you can focus on the stock selection Master Key with more confidence and efficiency.
Jay gets it all done in 10-minutes, and in today’s Market Review I’ll outline those steps with you.
I take a little longer because I’m doing it for you as well as myself – oh the sacrifice!!
Market Outlook:
Last week I said what I expect to happen is a short term pullback, and then we’ll see how the indices react against their 200-dmas.
We got the pullback, and I expect the SPY and QQQ to edge nearer their 200-dmas.
Here’s the thing to watch for … If the IWM (Russell 2000) drops back below its March 30th bar, then we’re in for another decent drop. If it holds, then expect further bumpiness, but not a capitulation. If the IWM fails, then you’ll see the SPY and QQQ waterfall off their 200-dmas and a further -10% will be on the cards.
Why is the Russell important here? Because it’s an index of smaller cap stocks (the bottom 2/3rds of the Russell 3000) and is typically a leader in bearish markets and a follower in bullish markets. So far it’s been remarkably resilient, bouncing off its 200-dma in the last few weeks. If the market does want to weaken further, I expect the IWM to lead.
My original forecast a few months back was for a broad based 10-20% drop across the four main indices. We’ve achieved the minimum. Further weakness will test that deeper number.
As I also mentioned last week, after this bearishness is played out, there will be a bountiful recovery of the sort we like best, so it will pay handsomely to be prepared for that eventuality.
It always pays to be in touch, even if you’re not actively trading.
Our market commentary continues to be outstanding. Mastering market timing enables you to swim WITH the tide at the right time.
Watch the video for more detail.
Market Timers:
Longer Term Market Timer (OVIsi):
Red (remember it’s slow).Medium Term Swing Timer:
Bearish, but pointing upwards having been oversold.The Main Indices OVIs:
All indices are neutral to slightly negative.
Stock Selection:
The instant chart loading continues to be a blessing … The pattern annotations on the charts were released to VIPs last week, and the chart rewind functions will be released to Bootcamp attendees very soon. You can already see how they’re making a big difference.
I’ve found some interesting bounceback setups this week after a positive momentum finish to the week on Thursday.
Earnings starts next week, so we’ll focus on pre and post setups from now on.
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