Should Investors Be Panicking Right About Now?

Daily Chart AJanuary 20 InvestWithAlex

1/20/2016 – A negative day with the Dow Jones down 249 points (-1.55%) and the Nasdaq down 5 points (-0.12%) 

If you are keeping track, and not very many people are by this point, the Dow has lost 10% since the beginning of the year while the Nasdaq has lost 11%. And while most bulls were expecting a blow off rally to new highs just a few short-weeks ago, such dreams no longer exist in today’s market environment.

But investors must remember, financial markets don’t travel in straight lines. And given today’s extremely oversold conditions and technical indicators, some sort of a bounce is imminent. Or is it?

Let’s quickly look at two charts. First, today’s S&P…..s&p chart long-term

As you can see, it broke below an important technical support level earlier today. Quite by a considerable margin. Suggesting that the break was real.  Something similar had happened in 1987. At least structurally or sentiment wise.

s&p 1987Once the S&P broke below prior support in 1987, it proceeded to collapse in now infamous crash.

Are we dealing with something similar here and should investors be panicking right about now? 

Yes and no. Yes, in a sense that we are operating under very similar technical and sentiment conditions. As my earlier blog post suggested, investor sentiment has turned violently bearish. Plus, the market is heavily oversold, by most traditional measures. Again, similar conditions existed right before the 1987 crash.

At the same time, we are in a completely different cyclical environment. At least according to my mathematical and timing work. An environment that doesn’t necessarily call for a crash.

That is to say, while conditions for a crash certainly exist, it is just as likely that we will experience a monster short covering rally or a bounce.

So, which way will the market swing?

While our long-term forecast is crystal clear, short-term it is incredibly complex. But if you are still interested, please Click Here to find out.

This conclusion is further supported by my mathematical and timing work. It clearly shows a severe bear market between 2015-2017. In fact, when it starts it will very quickly retrace most of the gains accrued over the last few years.  If you would be interested in learning when the bear market of 2015-2017 will start (to the day) and its internal composition, please CLICK HERE.

(***Please Note: A bear market might have started already, I am simply not disclosing this information. Due to my obligations to my Subscribers I am unable to provide you with more exact forecasts. In fact, I am being “Wishy Washy” at best with my FREE daily updates here. If you would be interested in exact forecasts, dates, times and precise daily coverage, please Click Here). Daily Stock Market Update.January 20th, 2016  InvestWithAlex.com

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