A few months back I shared big picture and mentioned key points to watch out for a Bear market signal. A lot has happened since then, but I still haven’t opened OPValue Portfolio (new). At the same time, nothing much has changed in the markets and we are almost closer to the earlier lows. I again mentioned key points to watch here, as specific as I possibly could. In the interest of OPN readers, I shall mention those points again with the help of a chart. Inspired from Dow Theory, I shall repeat what I mentioned to OPN subscribers on Feb 02 –
A few weeks back I mentioned about my new warning, a danger zone as signified by Dow Transports movement and Dow Industrials. I am attaching the charts below (2 y axis chart). Though you may choose to ignore this and “potentially” benefit from double bottom and probably rebound, I SHALL CAUTION ONE TO STAY AWAY FROM EQUITIES for short period immediately followed by this danger zone penetration and breaking out of it.
Preserve capital and that may provide plenty of opportunity in future.
If the earlier lows can hold, it may be an opportunity to get in via double bottom (though I am suspecious of a bottom so early) and if it is penetrated, then we are probably looking for much lower levels, as I mentioned above.
Oh BTW, do you remember this covered call with Ultrashorts, though I have made several changes to maximize gains since then, the original trade, shared for free, will be able to keep full profit (unless the market rallies strongly and SRS drops below $61).
Trade carefully, Trade Profitably, OP