Is The Bull Market Starting Now (2022)Nov 22, 2022
What if we don't crash to 3000 on $SPX, and what if we don't take off to new all time highs?
In this business, trading, investing, speculating, gambling, whatever you call it, everyone thinks that they need to be focused on these big price target levels.
They believe that they NEED to have a big prediction about the market, they need to tell everyone about their prediction, and here's the really stupid part, they use real money to back up their prediction.
It's important to know the game you are playing.
Are you playing a game to make predictions to try and sound smart to people so that you can remind them later on how right you were?
Are you playing that game?
Let me be perfectly clear about the game I'm playing.
I trade to make money.
I'm not worried about what other people think of my opinions about the direction of the markets, and I rarely have an opinion on the direction.
But what I do know is what type of trade or position to take in any given market regime.
When I understand the market regime I can throw away all the different ideas I might have about a market, and know that there is either something to do, or nothing to do.
Let's take a look.
$NQ (NASDAQ 100 Futures)
Currently in the Neutral Market regime (yellow histogram) after leaving the bear quiet market regime (red histogram) back in July.
There has been no capitulation, no chaos, nothing but a 10 month move down in a nice and orderly fashion.
If we maintain this market regime, we should expect excellent day trading (long and short) opportunities to persist.
Historically, we have a pretty good chance of this regime persisting, 2,176 days of the $NQ's life has been spent in the Neutral regime.
The same number of days have been Bull Quiet, in fact those two regimes combined account for the majority of days.
So, if making money is the game you are playing, you should have a trading system that performs in both Bull Quiet and Neutral regimes.
The Curvy trading system performs well in Bull Quiet, Neutral and Bear Quiet regimes.
(The updated version of Curvy will handle the rest of the regimes when it's released soon).
In other words, if $NQ trades like this, we are set.
And now here's the fun part.
The CPI (Consumer Price Index) report that came out November 10th caused the 13th largest rally in the $NQ in history.
Mildly interesting, if at all.
But what was interesting, was that THE BEST LOOKING SELL SETUP EVER...FAILED!
If you've been following me for a while now, those words should be ringing alarm bells more than anything else I've ever said.
And if you don't know, or need a reminder, this is what happened.
When the best looking sell setups in the world, fail, that's the market telling you that it is more bullish than anyone believes it to be.
Last Tuesday, after the CPI rally, another clean sell setup formed. So far it hasn't failed, but it isn't selling off...rather it's being met with buyers.
If this continues, I will be buying and adding to $NQ futures (or $QQQ calls) each and every time it fails.
You can join right along with us in the Trading Lab as we continue to beat this market
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