Mark.Minervini X update (05/04/2024)
Yesterday, we saw a sharp rise in the volatility index and the volatility of many individual stocks. It appears we have entered a belated shift in price behavior, and trading breakthroughs will be challenging.
First-time jobless claims are still low, close to pre-pandemic levels, and below historical standards. Wall Street had predicted that the Federal Reserve would start cutting interest rates in March. But that never happened, and it's unlikely to happen anytime soon. Now some people are questioning whether interest rates will start falling this year!
As volatility rises, bullish sentiment rises, and individual stock trends are questionable, I see no reason to take any other action other than to be cautious for the time being and until the situation improves.
The long-term trend is upward, but a short-term pullback of 4-7% or even as high as 10-12% is normal. A pullback of this magnitude probably won't happen, but it is long overdue.
We haven't seen $VIX increase of 150% or more since 2006; before that, it was 1993. We entered a bear market in 2006, but 1993 was just an adjustment/consolidation.
Our long-term $SPY trend model is still bullish and we haven't seen a major top form. However, our equity-specific STEM risk model is at the highest level of caution. That's pretty much all we need to know in the short term. Breakouts don't work, stop losses don't hold... no trades.
First-time jobless claims are still low, close to pre-pandemic levels, and below historical standards. Wall Street had predicted that the Federal Reserve would start cutting interest rates in March. But that never happened, and it's unlikely to happen anytime soon. Now some people are questioning whether interest rates will start falling this year!
As volatility rises, bullish sentiment rises, and individual stock trends are questionable, I see no reason to take any other action other than to be cautious for the time being and until the situation improves.
The long-term trend is upward, but a short-term pullback of 4-7% or even as high as 10-12% is normal. A pullback of this magnitude probably won't happen, but it is long overdue.
We haven't seen $VIX increase of 150% or more since 2006; before that, it was 1993. We entered a bear market in 2006, but 1993 was just an adjustment/consolidation.
Our long-term $SPY trend model is still bullish and we haven't seen a major top form. However, our equity-specific STEM risk model is at the highest level of caution. That's pretty much all we need to know in the short term. Breakouts don't work, stop losses don't hold... no trades.
Mark has been continuously updating the above continuous content for more than 4 weeks.
I don't know what's going to happen next,
However, the market performance in the past month has been very weak, waiting for the market to revise the chart and new forces to emerge 🚴🏻
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MattSully : Thanks bro
. Trimming my positions aggressively too! Are you 100% cash now?
sTone83OP MattSully: Around 75%
MattSully : Don’t actually understand Mark’s post about 150% rise in VIX… coz I see it just went up a few points from 12 to 16…. What does that mean?
sTone83OP MattSully: I don't know; it should have something to do with what he learned in his 40 years of trading
MattSully : Great to know that I’m not the only one feeling his post is over my head