The week of Jan. 18, 2022, set the stage…
That’s right… One week’s price action set the stage for where we are today.
That’s the week that the overall bullish uptrend broke, and price settled below it.
If you’ve been trying to buy the overall market since then, you probably haven’t had too much luck.
But if you’ve been selling the market, you should be killing it!
Let me show you what I mean…
Here’s a weekly look at the Dow Jones Industrial Average…
The primary uptrend channel, contained by the blue structures, were broken, and price action settled below the 200-day simple moving average (SMA).
Here’s a look at the Nasdaq 100…
Do these two charts look somewhat similar? They should.
Price again broke the primary bullish uptrend channel and settled below the 200-day SMA as well.
And finally, here’s a look at the S&P 500…
Well, there you have it…
All three major US markets broke their long-term bullish uptrends and settled below their 200-day SMAs all in the same week.
This was the trigger to pivot to a new strategy, not to stop trading or get out of the market and run scared.
This was the clue that it was time to play with the bears and no longer with the bulls.
This very identifiable occurrence was nothing more than an opportunity to pivot towards the new trend and make that new trend your very best friend.
Now, could the market have just briefly corrected and gone higher?
Yes, but as you can tell, just a few short weeks later we were able to start building downward momentum structures.
That confirmed the trend change. When the trend is “unidentifiable,” that’s when it’s time to step aside and let the market make a decision before jumping in.
So, while that was occurring, there’s no shame in preserving your account. Once the trend is confirmed, then it’s time to start the hunt for opportunities.
At this moment in time, the markets continue to exhibit downside pressures, so we continue to look for downside opportunities.
When that pivots… so will we!
Looking for More Alpha?
Before I go, I want to personally invite you to a special LIVE presentation with my colleague and expert stock trader Ross Givens.
Ross’s premium Alpha Stocks research service focuses on only the very best stock trading opportunities — both on the long side as stocks rise and on the short side when markets are crashing.
He recently recorded a 21.6% gain on the downside in only eight days as Pegasystems Inc. (PEGA) stock plunged…
As well as a gain of 21.3% in just 15 days in Permian Basin Royalty Trust (PBT) as that stock broke out of its range.
And last Wednesday, Ross closed another winner in ProPhase Labs, Inc. (PRPH) for a two-day gain of 5.8%.
Rules to Live By
“We are flawed creatures, all of us. Some of us think that means we should fix our flaws. But get rid of my flaws and there would be no one left.” Sarah Vowell
Until next time, I wish you a beautiful and blessed day!
Yours In Trading Success,
Anthony Speciale Jr.