Be wary of upcoming fake-outs.

by kotdbt

For those who have been through a prolonged bear market, feel free to skip or just comment “ban”.

For the newer folks here, be prepared to have your emotions fucked with big time over the next few months. Markets can’t go straight down and in order to syphon money into the market so the smart guys can drink your milkshake, there have to be fake-out rallies to shake out weak hands.

A few of these dead cat bounces are going to sustain multiple days or even a week. We will likely make a higher high then a higher low before going over a huge cliff. This is especially true as we near options expiration dates.

We are in an extremely volatile market and you are going to feel sick on some days looking at your account, but just remember, there is only one reversal and typically a bunch of fake-outs. At the rate we are dropping we would be down over 50% by mid April if we didn’t have some upside swings. I would expect we test the weekly 200 MA or EMA before another large leg down.

TL/DR: Bear markets have multiple fake rallies before real rally. Be wary that market will test your emotions.

 

Disclaimer: This information is only for educational purposes. Do not make any investment decisions based on the information in this article. Do you own due diligence.

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