Investing in the Time of Covid: 3/26/2020 : by Woody Dorsey.
Know who you are. Are you an investor? Are you a trader? Are you a swing trader? Are you a day trader? Are you in it for the long haul? (whatever that is) Most of us don’t really know and we don’t really know what we are doing in the market. The market is revealing a bit of Reality . This may be very useful for all of us to reflect on what we are doing and why. I have studied these markets for decades. I strive for the simplicity of what may be called the Direct Path to Markets. I have cultivated a kind of disinterested objectivity. I try to directly see market behavior. One may then make inferences based on historical facts. Markets are not Rational. Money will be different in the Time of Covid-19. Know who you are!
What is going on? Financial Culture made an unusual extreme. Global developments suggest that a historical shift has just begun. One may liken it to a 100 year flood. It may influence us for decades. Money is changing.
Monthly History: shows just how typical and cyclical market movements are. I am looking here at the two significant corrections from Mania to Nadir. They may appear quaint now but were important at the time. This is how markets behave. In light of this, let’s forward to where we are now.
Maha Mania: Note how furiously stocks rallied into February. One sees that now, as usual, in hindsight. This behavior confirms it was a Great Mania. Such Great Extremes (Maha Mania) are unusual in an investors lifetime. The weekly chart below shows recent forecast Interim Trend Duration. Extremes take time
Now: Are you a swing trader? Do you Believe in the market? Are you in for the Long Haul? No one knows what is going to happen. Look at what has already happened. It infers this is a Changed Market. Allow for this swing low.
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Information is for paid customers and may not be copied or distributed Copyright 2020