I’ve been in the business (two businesses actually) of trying to profit from stock market drops and bounces for years. It was a lot easier before October 2014. Since then we’ve seen central banks do surprise intrusions every few weeks, laying waste to tactical long-short strategies.
Here’s a chart showing the mini Greedometer 8 and 9 sequence. Even without any training in this system it will be obvious that when the mini Greedometer line (red) reaches a baseline or topline (straight green lines) the SPX inverts. And that’s how to be long or short and make money.
I draw your attention now to October 2014. There’s a note showing QE3 ending. There’s also a massive vertical ramp in mini Greedometer values — up through the topline. I recall that point in time (mini Greedometer at topline) painfully because it was one of the last times I did a live Nasdaq market center interview wherein I said we were within 1 week and 1% of the SPX initiating a protracted crash. The next day saw the BoJ do a surprise announcement it would dramatically increase the size of its QE program (this sort of surprised central bank intrusion has happened many times over the past 6 years –just as I say a drop is imminent). The BoJs announcement bought a month of SPX partying and for me a wave of criticism from online trolls. A few months later we saw the ECB capitulate and launch its own QE program, truncating that sequence (after being warped by announcements and threats from the BoJ). After that debacle, it became clear to many that the Greedometer algos had effectively become a warning system for central banks to spike the punch bowl to avert a near term market crash initiation.
Here’s a video walking through the chart above….
In short, central bankers have not allowed a mini Greedometer baseline point to be seen since October 2014. I’m thrilled to write that if no one chimes in soon, we’ll see a first baseline point this week (next week at the latest). Then the sequence will be locked in and so will the SPX forecast —until someone blinks at the Fed, causing the sequence to be warped slower/shallower. This video explains….
Yeah, markets are random….