There are moments in the market, where we get to emphatically type bullish projections and outcomes. Those are a lot easier articles to write than to create fear that turns out to be nothing.
Forecasting the future is not what we do. We look for inflection points in the markets. At those inflection points, it is a place where the market can find support and push higher. Conversely, when the setup is there, and the market breaks down as dominoes start to fall, the action is usually swift.
For subscribers, the drop in February was not a surprise. The February 22nd newsletter reported a market running on fumes. Now that we had a 15% correction, is it all over and up we go?
We had many significant signs for a bottom to form, so that is what we watched for. Whether or not it will be successful, is the next piece of the puzzle. The next week should be telling.
“you DEFINITELY helped me avoid this downturn. Thanks so much” – Bruce C. March 2, 2020
We are in the next stage now of finding how the markets are reacting to the initial selloff. After the rally off the lows, I am watching areas like semiconductors to see if the lows of February can hold.
Transports have not been able to make any headway lately, largely dragged down by the airlines. However, the rails and trucking have been holding up better but still not great. The chart below is from the transportation index.
The momentum shown by the PPO for the trucking index has broken the uptrend and is close to going below zero on the chart below.
It’s an important time to watch the markets closely to protect capital or get ready to put it to work. If you are not currently following someone who helps you find strength in markets outside of technology, perhaps you might enjoy subscribing to my newsletter.
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It is really important at times like this to use the strength of the CMT designation to look through thousands of charts to understand what the risks out there are. For less than $10/week, you’ll receive a chart every week telling you the proprietary strength gauge of the market, the top 10 charts Greg is focused on and why, his chartlist of thirty interesting charts, a member’s only 1-hour weekly video, monthly conference calls, special edition reports, investing themes, opportunities in Commodities which move fast both ways, and unique perspectives outside of the same old crowded tech names. Most of all, the focus is capital preservation. Participate in the big up moves, avoid the big down moves!
If you join right away I can send you links to the March conference call video which I think is one of the most important big pictures views you can get in the industry. I’ll also send you the last two newsletters so you can see what I was saying to help investors miss the big downturn.
Here is my latest video on some ideas to find new places to look for opportunities.
Good trading, Greg Schnell, CMT, MFTA
Chief Market Strategist, GregSchnell.com