So … I’ve barely been paying attention to the market lately … too ensconced in work and politics. But the big recent drops finally got my attention, and I decided to spend my Friday evening taking a look. First, I really don’t like the double-top pattern I’m seeing … if I were a casual investor, I’d go to cash as it looks like we’re going sideways for a while or … dropping precipitously. If I were still trading, I’d be spending a lot more time attempting to understand exactly where we’re heading, and with enough time, I could likely figure it out, but since I have no pony in this race at the moment …

As for being Right … WOW!!! Looking back at my posts, I once again called the Day. Of. The. Bottom. of the Covid Crash. I say this not to pat myself on the back (well, ok, sort of), but just to PROVE that the folks that tell you that timing the market is impossible are just … straight up lying to you. They just want their fees … LIARS.

scottvanv on May 28th, 2020

I wish I had more time to spend showing you the patterns I see, but, I don’t. I’ll have to suffice to keeping up my writings simply on timing the market, which at a multi-year scale is incredibly easy.

My last post said that there was no “all-clear” back to a relatively safe environment, but it’s now looking like my day-of-the-bottom call was correct, and that we’re not going to slide into a very deep correction based on the Classic cup-with-handle pattern that I’m seeing right now.

Net, net, for anyone using these posts to minimize their exposure to possible downsides in the market, the most aggressive could have gotten in on my bottom call, medium aggressive folks could get in now, and it’s likely that the market will continue to go up and to become less volatile over time … and this is when the most risk-averse, least aggressive would want to get back into equities.

scottvanv on April 2nd, 2020

To be clear, I have yet to provide an “all clear” yet. The market is still waaaaay too volatile to be calling a true bottom. Also, I do this contextually … I don’t just look at the “tea leaves” of these charts. I’m quite worried that this virus downturn is going to be far worse than even the $2.2T the gov’t is spending to combat it. I’ll explain more, with charts, in a future post.

scottvanv on March 24th, 2020

… more to come.

scottvanv on March 17th, 2020

So … yesterday around midday I took a look at the fact that we had dropped 3,000 points and bounced. Unfortunately I wasn’t watching CNBC all morning like I was in 2009, so I couldn’t “feel” what was coming from the NY traders through the hosts to truly call a bottom. This left me a bit blind. However, given that we bounced almost precisely off where I said we would, I thought there was a possibility that we had bottomed. I texted a buddy to this effect … he disagreed, and we subsequently dropped again. I was wrong. Maybe. We stopped at just above 20,166, and then this morning we bottomed at 19,882 and rose over 1,000 points. Are we done? Maybe. Everything seemed a bit too calm this morning on CNBC (I did tune in today), but this might have been a consequence of the hosts and the traders all working from home. We’re ALL blind. We can’t “feel” each other. Having said that, I did watch a political podcast where the host had panicked-sold ALL his stock (a good sign for a reversal), and tons of liquidity is now being poured into the system, with lots of stimulus and really interesting forbearance programs in the works. This, combined with said strong response and a now realistic expectation of just how long this will likely last (Jun to Aug), the market may have priced in all of the worst news and uncertainty. The speed of this decline has been phenomenal … if we drop further my next target would be 18,350 then if we go below 14,200 … oh my. I am cautiously optimistic, but if I were still trading I’d be in cash getting ready to buy or possibly short, depending on how the next few days plays out.

scottvanv on February 25th, 2020

As usual, a big market drop got me interested in the market again. Above please find a very long term look at the Dow … since before the Great Depression (suggest clicking to enlarge). I drew the red line five years ago(!), and note how we’ve been bumping up against it recently. Also note how the green channel is intersecting it … for the longest time I thought we’d eventually keep following the green channel up through the red line, and we’d have a few more years until any sort of massive drop in the market because we’d be following the white channel. Now, I’m not so sure. I think there’s a possibility that we could drop to ~20,000, a 33% drop. If I were still trading, I’d be in cash.

Also, please note how I do this … I’m not whipsawing in and out of the market, but when the probability gets high that we could drop significantly, I recommend getting out. If the probabilities change, I’ll give an all clear. I’ve been right now since 2007 … every major turn. Would that it were that I had enough money to do this for a living …

scottvanv on June 25th, 2018

Pretty sure no one is using this blog for market timing, and no one should be.  I had meant to post for some time that the market hadn’t really firmed like I thought it was going to per my last post, so when the market dropped a lot today, I thought I should post again.  We’re still in a chop zone (sideways), and could be for some time.  If the Dow drops significantly below 23550 and stays there for a while, we’re likely due for a much larger correction.

scottvanv on May 21st, 2018

If I were still studying the market rigorously, the timings of these “get in, get out” posts would be much better.  With that said, if one had gotten out on my last post, you’d have mitigated a possible much larger decline, while still only losing out on around a 4% gain.  Looking a bit further out, I’ll go so far as to say a much larger correction is due right around the beginning of 2020 … big enough to be a symptom of a recession.

scottvanv on April 3rd, 2018

Without going into a lot of detail (simply due to the fact that I can’t spend a lot of time writing these anymore) … a larger decline is looking more and more likely based on some ugly charts.  Not a good time to be in equities.

scottvanv on February 8th, 2018

I know that all 2 of you that read this blog are cursing me for not getting you out of the market prior to this precipitous decline.  But, I’m not actively trading at the moment, so the market only really piques my interest when something crazy like these big drops occur, so this happened too fast for me to research and post something.  For various reasons, we were absolutely due for a correction, so this wasn’t too surprising to me (perhaps the speed of the decline was).  My best guess is that we’re either going to crazily go sideways for around a year, or we’ll quickly drop to around Dow 23,000.  From either option, we’ll likely head up to around  35,000 to 37,000, and then we’ll be due for a more substantial correction and a recession.  If we shortly drop significantly below 23,000, watch out below.

Here’s an interesting read on the value of the market relative to interest rates, written at the beginning of the year.