This is a two-series post.
Part 1. US. History is all we have.
This is a very simple and kind of a useful technique but only if you know what you’re looking for. The rule is not a rocket science that says: the market is a pure chaos between two points A and B under research. Obviously, all we need is to find that potential turning point like A or B to take a side.
Looking back in history we may find two such points in May-June 2001 and May-June 2008 (yellow boxes). Those times we had -40% and -50% drops. Turning points were May 21, 2001 and May 19, 2008 (the fact that May played its role is a coincidence, those could any of the 12). We made that conclusion because of the major trend that should prevail. It is indicated by the monthly timeframe (a bold red trendline).
-ks
Part 1. US. History is all we have.
This is a very simple and kind of a useful technique but only if you know what you’re looking for. The rule is not a rocket science that says: the market is a pure chaos between two points A and B under research. Obviously, all we need is to find that potential turning point like A or B to take a side.
Looking back in history we may find two such points in May-June 2001 and May-June 2008 (yellow boxes). Those times we had -40% and -50% drops. Turning points were May 21, 2001 and May 19, 2008 (the fact that May played its role is a coincidence, those could any of the 12). We made that conclusion because of the major trend that should prevail. It is indicated by the monthly timeframe (a bold red trendline).
-ks
