I'm becoming very encouraged by those waiting for confirmation of the trend, even if you are just looking at the regular candles and not the beer candles.
But what is confirmation? How do we know?
Remember that we are in a bear market (until we're not). So the trend is down. Confirmation downward only takes 2-3 daily beer candles before you can make good money to the downside. Hourly, it might take 4-5, but it's the same.
But most here aren't shorting the market or major indices. So you're itching to get involved upward. That's why you keep throwing in at every bottom Jim Cramer slurs his words over, despite the FED admitting they are following the 2-year (hint, watch the 2-year bond.. what the market does with that tells you what the FED will be doing).
So what is confirmation of an upward trend? In a bear market, it takes longer and acts like a high school track athlete in that it has to win "multiple events" to even start to become talked about.
Let's look back at the dot com bubble burst. This was the most recent period similar to the current where the market was coming off a decade or longer of a parabolic move and entering a potential recessionary environment.
https://i.imgur.com/qlYT8Nj.jpgSee how quick the downtrends confirm with each new leg? But the only uptrend that you didn't get caught with your pants down was the one that took a while and finally broke above the long term trendline downward. And that was after the entire leg down retraced the prior move up by at least 50%. Of course that was merely phase 1 as the next near decade was a bear market bounce that ended with another low. But that uptrend was still profitable. And did you have to jump in at the very bottom to make money? How bad was it to wait for confirmation? Not very.
Now let's look at the grand scheme of where this current downtrend falls.
https://i.imgur.com/JSTkDxF.jpgI didn't draw it here, but this current move down hasn't even hit 50% retracement since the pandemic, much less the last major bottom (Great Recession). And we're well below the downward trendline still. Look closer..
https://i.imgur.com/1pXrUS1.jpgIn fact, we have to fight above a smaller trendline before we even get a shot at the final race against the big trendline.
Long story short, if you are long, be very careful. I wouldn't be. And the futures beer candles show a potential rounding top. But I also wouldn't be short yet. We're in the kitchen right now and the chef is chopping. And remember, it doesn't take long for the downward trend to confirm. Once it does, go wild. And we don't exit downward trends after we enter until we get the first green beer candle or upper wick.
"H-A: In return for the flattery, can you reduce the size of your signature? It's the only part of your posts that don't add value. In its' place, just put "I'm an investing savant, and make no apologies for it", as oldarmy1 would do."
- I Bleed Maroon (distracted easily by signatures)