I am going to break one of my cardinal rules today and talk about what I “feel” is in the works this week.
Namely, a turnaround day.
Unfortunately, even if I am correct it doesn’t mean we are all clear for the market to start marching up again.
I am worried that we are close to a “fear phase” in the market, which is normally followed by capitulation and then despair…
Before rebounding to mean valuations.
I don’t know how long you have been trading, but I can tell you that in the capitulation and despair phases of market psychology people get hurt…
And often hurt badly.
We aren’t there yet, and I’m not convinced we have to go there…
But if we do, caution will be the name of the game.
Yes, there is an opportunity – but you better know your stuff, or get someone on your side that does know their stuff!
Either way, don’t be fooled if you see a big one-day turnaround in the market this week.
Nothing is for sure, and we are “near the fear,” so keep your eyes open and trade carefully.
To Your Success,
Steve
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