When Exactly the Market Crash will Happen? Get Ready to have a Reverse Trend
Constant fluctuations are the sign of the beginning of a reverse trend. The downward fluctuations on the uptrend index always shows the change in the sentiments of the traders. These changes might be caused by many reasons. Moat important can be the correction(or sell-off) caused by the long position holders(organizations or firms). These are the holders which can own around 50% of company's stock. For example currently, the institutional holding of tesla stock is around 43.22%(might have changed in this quarter).
These long term investors can invest in the stock for as long as 10-20 years. Depending on the circumstances. However during the peak or the reverse trend of the market, they can sell off some percent of their stakes to withdraw funds from the market, which is usually so large that it creates a negative slope of the index.
These long term investors can invest in the stock for as long as 10-20 years. Depending on the circumstances. However during the peak or the reverse trend of the market, they can sell off some percent of their stakes to withdraw funds from the market, which is usually so large that it creates a negative slope of the index.
Generally, the stocks which are owned by the public are around 7-8% and are traded in the market. Where, these long position holders(institutions) do not trade. However, in case of emergency or crisis they usually starts withdrawing the money from the market by selling of their stakes. This activity we have seen on Black Monday(1987) and housing crisis(2008).
As, you have seen historically every crash happened when General public were least expecting it. These are the times before which most of the population were sure about the market's positive trend and were only buying the stocks and holding it. Thus, what we need to do right now is to predict when people are very highly positive about the market to go up, this will be the time which will mark the downfall of indexes worldwide. After a careful observation and thinking, the only time when almost everyone will be positive about the market will be after the release of the official vaccine for the covid19. The vaccine is at the final stages of trials in the United States and might take 3-4 months more to reach out to general population. However, only in my opinion the successful final trials of the vaccine will give general population a sign to invest into market, which will also be sign for us to withdraw the funds and put some negative positions on the market.
As, you have seen historically every crash happened when General public were least expecting it. These are the times before which most of the population were sure about the market's positive trend and were only buying the stocks and holding it. Thus, what we need to do right now is to predict when people are very highly positive about the market to go up, this will be the time which will mark the downfall of indexes worldwide. After a careful observation and thinking, the only time when almost everyone will be positive about the market will be after the release of the official vaccine for the covid19. The vaccine is at the final stages of trials in the United States and might take 3-4 months more to reach out to general population. However, only in my opinion the successful final trials of the vaccine will give general population a sign to invest into market, which will also be sign for us to withdraw the funds and put some negative positions on the market.
It is just a suggestion based on my personal opinion that Mooers can take advantage of this opportunity to opt out earlier(to escape from losses) and use some of their funds to buy puts or sell futures on market.
Even after this event, if the reverse trend on the market is confirmed, moomoo community traders can also take advantage by short selling at every high point in downtrending index. There is another reason I believe for the crash of the market is because of the segregation of technology, this has a high impact on the market, since you can relate the changes in technology since last 20 years with the change in index of market. It can be explained by sollow model which I might write about later.
Market is risky at this stage, however I think index and stocks will float between a certain values before it finally starts to go down. For example, tesla may have the floating points of 460 high and 370 low. So the stock might move around between these points reducing the option positions. So, for option position holders it will be a good choice to trade the options in profit rather than waiting till the expiry.
Again these are my opinions, that I would have taken based on the research I do among other things. I believe in sharing my knowledge to help as much as I can. Hopefully, this information might be helpful.
Happy trading.
Again these are my opinions, that I would have taken based on the research I do among other things. I believe in sharing my knowledge to help as much as I can. Hopefully, this information might be helpful.
Happy trading.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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curtaincall : Great analysis, simple and straight to the point. Happy to see people like you in moomoo sharing insights and ideas.
Allen : The stock market seems to be disconnected from reality. Thanks for your inslightful sharings
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70152282 : very good analysis. point to point. thanks
70139771 : love the info
BeardedTaco : thank you very much for sharing your observations and hypothesis on the correction we all sense is coming. it was also nice to hear one of the ideas I had kicking around though I didn't think about monitoring institutional investment extra-market. that I will have to pay more attention to. I am curious to see if it co-insides with the "great reset" that is taking place in the global financial system. if a convergences of these two potential catalysts occur I would be ready to use any dry powder you have left on puts while withdrawing and longs. that's just my thinking anyway.
70133731 : very logical and thoughtful approach and I agree with you.