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  • AvatarBob Smith
    Participant
    Post count: 91

    So is the market correction officially over? It looks like a double top to me.

    The P/E’s are still at nosebleed levels. So a “crash” is still looming I would think.

    Is this a reset, will there be a new steep drop off with a new “Bear Bounce”?

    Sean HymanSean Hyman
    Keymaster
    Post count: 3390

    I believe a crash is still coming due to insane valuations. If it stops at a double top, no one knows ahead of time. I know the technicals continue to weaken on this latest leg, which enhances the shot at it.

    Not sure what you mean by a reset.

    AvatarBob Smith
    Participant
    Post count: 91

    Is the first drop and short covering rally over?
    will it repete?

    Will there be a second drop and Bear Bounce?

    Sean HymanSean Hyman
    Keymaster
    Post count: 3390

    It all depends. If the S&P 500 were to somehow push above its former highs, then it would still have an a-b-c downward move ahead of it.

    Typically, the right side of a double top is the end of a wave 5. Either way, we’ve got either one massive wave C ahead of the market or an entire a-b-c downward move ahead of the stock market.

    But what do we know FOR SURE. P/E’s are at crash levels and earnings overall are slumping. The market relative to GDP is the highest I can ever find since its been tracked…higher than the crash of 2008 and higher than the crash of 2000.

    We know that that tech stocks are in a bubble like in 2000 and will pop like the NASDAQ did. And we know that the overall stock market is in a bubble and massively away/above its 200-week moving averages. We also know the sentiment is uber-positive and the average Joe only thinks stocks can go up. Many people investing today haven’t been through their first bear market, therefore, they’re not expecting one.

    So, ultimately, I’m expecting another massive down-move. However, what it does ultra short-term is anyone’s guess. I have my suspicions of what will happen, which I posted yesterday in the “my thoughts on the market” thread.

    AvatarBob Smith
    Participant
    Post count: 91

    Just looking at the tea leaves. Trying the track the a,b c’s of things.

    I have a house sale in escrow. If the market is going to crash let it wait or go slow for a couple of weeks.

    Otherwise I am ready with cash in hand waiting for $SPX 2300 for the first purchase on the way down.

    Sean HymanSean Hyman
    Keymaster
    Post count: 3390

    It wouldn’t surprise me if the next down-leg is soon. But there’s no way to know for 100% sure. But a number of technicals are weakening and that’s what precedes the downturn.

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