The "Trump impeachment channel"

Well, since folks love to use the term "Trump rally", i thought i would use the term "Trump impeachment channel" for the long term controlling channel. Currently the channel lies around SPX 2500. If SPX 2500 breaks, it would be a full fledged bear market. You can forget about any subsequent new highs, if that happens. As long as S&P trades above 2500, the bull market is alive and well.



Well, firstly i don't like the term "Trump rally", as it would assign the stock market rally causality to politicians. If the 40% rally in 2017 was the Trump rally, then the 200% rally off the SPX 666 lows should be called the "Obama rally". We know both are not true. The Trump impeachment talks have been going on for over an year. As long as the stock market trades above that long term channel, i would say "Forget it !". No impeachment will occur until the social mood turns sour and the market enters a bear phase. Right now everybody is drinking their Kava tea and are happy and ebullient !

Comments

Post a Comment

Popular posts from this blog

What exactly is Trading Edge ?

Any trader in the markets, for any length of time understand that in order to suceed as a trader they need to have: 1) Trading system with an edge 2) Money management 3) Good trader psychology and emotional quotient Trading edge is a necessary condition, but not a sufficient condition. Even a system with a positive expentancy can end up in ruin with bad money management (position sizing). It's called the "Gambler's ruin". I will talk more about that in a different post. Even with a good trading edge and money management, you could fail if you do not have the right psychology to execute the trade and persist in the face of losses. That's another subject for another post. 1), 2) and 3) are necessary conditions, but not sufficient conditions in themselves. I have heard people say flippantly that even a coin toss with good money managment can make money in the long run. Absolutely untrue ! If you do not have a trading edge, money management and psycholog
Read more

Sentiment - Long term vs short term

While the CNN fear and greed index can be a good indicator of short-term tops and bottoms, there is something more sinister at play here. Whenever the CNN fear and greed index goes to the extremes, a reflex bounce occurs to reset the sentiment. But that may not create the necessary conditions for a sustainable intermediate-term bottom. Here's why. The investors intelligence survey recorded some extremes in spreads between the bears and bulls. The spread even exceeded the 1987 top. I posted this many times on traders-talk.com. But this was largely ignored by amateurs and professionals alike, as the parabolic move gave a false sense of security that nothing could go wrong. The amount of froth and participation required to create a parabolic advance, in itself is a huge measure of sentiment. You don't need any sentiment surveys. Just one look at Dec 2017 to Feb 2018 charts of Bitcoin, ICOs and the S&P/DOW/Nasdaq should sum it all up. What differentiates a minor top from a
Read more