Hello Everyone, long term bear here that has now turned . I thought I would stop by and explain why I’ve recently bought back into the market.
Before continuing, please open the link below in an adjacent tab/window. I would also suggest opening the base image for a financial bubble. Thank you.
When we find ourselves unable to confidently predict upcoming price action, it is often useful to look for comparable benchmarks. Thankfully, (depending on your bags) financial bubbles are highly predictable due to the consistency in human psychology. For , it seems one of the most similar charts we can compare to is the NDX 100. Specifically, the dot com bubble. The charts are eerily similar.
To being, observe the mean on both charts. (Yellow) Both use logarithmic scaling. You’ll see that even over long periods of time, the trends hold.
Secondly, also observe that the tops and bottoms of the mean trend also maintain a reliable over an extended period of time.
In green I’ve identified the first sell off / bear trap to settle on top of the upper mean for support.
Most importantly, in blue, I’ve underlined the first real buy and sell action outside the normal price action that began the bubble. This is present in both charts. If you look closely, you can see that the price has served as the base for the final capitulation and the intersection of the capitulation mean for the NDX 100, many other financial bubbles, and as it seems, . Before the NDX 100 returned to the mean, it tested the resistance much like did within the past week. It failed initially, and then broke through. This is why I believe the current retracement is short lived. Based on the comparison, it seems we are at the very last point in capitulation before returning to the mean. You can see this circled in white on the NDX 100 chart. One last test you could say. It doesn’t seem my legend published correctly with the NDX chart. If anyone has any problems with the interpretations please ask questions.
That being said, I hope everyone has been patient. I hope your backs are still intact. And I hope you can wait just a little bit longer.
Regards,
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Tips appreciated.
Published at Wed, 26 Dec 2018 22:28:48 +0000
