MARKET CRASH

[VAmanBulls]

Inflation is back, cracks in the bond market, oil is elevated. Time to panic? The Fed is in a jam here. Do they keep rates high and keep inflation in check, or do they cut rates to support the economy but at the expense of inflation. I talked about the distribution the institutions have been doing, so obvious now. If you are positioned properly here, your mouth should be watering. Mine is. This is a one or twice in a lifetime set-up. We could see a bounce at the 200 day avg to make a small 'head and shoulder' pattern, filling the current gap. But I'm not confident we'll get that. I'm not even going to bother playing that, all about risk vs reward. I think an even larger head and shoulders pattern is forming. This would dump the S&P way down to the 5400 area. Am I crazy? Then, the Fed will panic, jumbo cuts. The market will jump (forming the right shoulder) back up to around 6100. I might play that with a quick in and out trade early summer. But then we drop again down to the April low of 4800 area. I say all of this because I think the potential 200 day bounce, if it occurs, will fool a lot of folks thinking the Bull is back. But in my view, a larger crash is underway. And if if plays out, and if you have a pile of cash in the G fund waiting, you will be rewarded. So don't panic, be calm and remove emotion.

[jimcasada]

I don't see a sudden crash coming, but more likely a '70's style stagflation setting in. The markets generally do well during high inflation times, but the inflation severely cuts into your gains. Sitting on a bunch of cash while inflation eats away on the valve of your dollars doesn't make a lot of sense either.

[Scarfinger]

I hope it crashes. Not because I am going to make some big play. I just want to buy at lower prices. Maybe lower my cost basis as I dollar cost average on the way down.

Best of luck to all!

[12squared]

I think an even larger head and shoulders pattern is forming. This would dump the S&P way down to the 5400 area. Am I crazy? Then, the Fed will panic, jumbo cuts. The market will jump (forming the right shoulder) back up to around 6100. I might play that with a quick in and out trade early summer. But then we drop again down to the April low of 4800 area.

What's the basis of the levels in your predictions?

[Bubba]

I think an even larger head and shoulders pattern is forming. This would dump the S&P way down to the 5400 area. Am I crazy? Then, the Fed will panic, jumbo cuts. The market will jump (forming the right shoulder) back up to around 6100. I might play that with a quick in and out trade early summer. But then we drop again down to the April low of 4800 area.

What's the basis of the levels in your predictions?

You didn't ask me, but my longer-term predictors are very, very negative. I suspect, however, that we're going to get a longer grind down than a full jump down and then up. 3M vs. 10 YR uninverted, gold/lumber ratio dropped over 50% at the end of last year, unemployment is creeping up and we're likely headed for our next spike in inflation. I agree that current SPX prices are not sustainable, but given the length of the inversion, we're likely to see a longer grind down than a sudden drop to 3000. I suspect we'll hit around the 2022 lows at some point in the next year and half. I could be wrong, but a few of these indicators rarely screw up and when they're all together, that's pretty indicative of what's coming. Good luck to all!

[VAmanBulls]

I think an even larger head and shoulders pattern is forming. This would dump the S&P way down to the 5400 area. Am I crazy? Then, the Fed will panic, jumbo cuts. The market will jump (forming the right shoulder) back up to around 6100. I might play that with a quick in and out trade early summer. But then we drop again down to the April low of 4800 area.

What's the basis of the levels in your predictions?

Thank you for your question, 12squared. The short answer is chart support and resistance levels. A combination of moving averages, historical highs and lows. First is the 200 Day moving is an important technical level. We are toying with that right now. Do we bounce at this level, which is common in a pull-back, or do we plow thru it to the downside. If we bounce, we likely will see a push to what is known as the cloud of resistance, around 6820. This would form a small 'head and shoulders' pattern. This is the scenario I said I was not going to play. Watch today to see if this forms with a bounce at the 200 moving avg. If we plow thru the 200 day to the downside, the 'double top' highs pattern is in play, a collapse is in play. Looking at futures this am, this may be in play. That suggests we'll go down to last November's low around 6500. I think we'll push lower to test the next resistance level at the Feb 2025 peak, around 6100. If this happens, a massive 'head and shoulders' patten is in play. Going down to the April low of around 4800. Around this time I think the Fed panics and does jumbo cuts. That pushes a bounce forming the right shoulder, bounce back to the Feb 2025 peak area - 6100. So the left shoulder is the Feb peak, head is the recent high of 7000ish, right shoulder back to Feb 2025 peak. Then back down to finalize the right shoulder to the trend line of around 5400, matching up to the lower trend line. Of course you know these are not exact numbers. Trend lines. Draw a straight line connecting 2022 high and the 2026 high for the upper trend. Draw a line connecting the 2020, 2022, 2023 and 2025 lows for the lower trend. I wish I could figure out how to paste a chart in here, easier to understand with a visual. So why am I so bearish when Bull is in my name. Several indicators are lining up. Inflation, PPI coming in hotter than expected. Add inflated crude oil prices to future readings. Fed statements, raised PCE forecast to 2.7. Note, rate cuts , and I think we'll see massive cuts in 2026, are associated with recession. The dollar, I think it bottomed, it's now on a uptrend - neg correlation to markets. 10 Year yield, uptrend - neg correlation to the markets. The VIX daily, holding above the 50 and 200, bad for markets. The VIX MACD, elevated in the positive - bad for markets. Several other issues going on with private equity, housing markets and employment. Hope that helps.

[bdrieck]

so you are all saying our TSP seasonal strategies aren't going to work?

[tnwhiskey]

so you are all saying our TSP seasonal strategies aren't going to work?

Not all strategies are built the same. Some have you in the market at this time, while others are out of the market. You just have to determine your risk tolerance based on your strat. I look at the strats as good tool in conjunction with the things VmanBulls mentioned.

[VAmanBulls]

Does not look like a bounce off the 200 day moving avg is forming, this could be problems.

[tnwhiskey]

Does not look like a bounce off the 200 day moving avg is forming, this could be problems.

The 200 MA is one of my lines for support. What's generally after that, 250, 300, 400?

[VAmanBulls]

Looking now at the last Feb peak, 6150. Not good right now.

[VAmanBulls]

Looked at some things this weekend and wanted to share my thoughts. Take it or leave it, do your own research. If your a buy and hold guy or a seasonal guy, this is not really for you. I'm more of a swing trader, I look for strong patterns, evaluate risk vs reward and make trades on that. That said, here's my opinion. We are going to see a bounce. Not sure if it will be enough for a small head and shoulders, but I do expect a bounce. I fear it will trick a lot of folks. I am not going to buy-in on any anticipated bounce. This is not a buy the dip situation with our limited TSP trade constraints (order in by noon, etc). This is a buy the crash situation. I'm waiting for the larger crash that I really feel will come. I see a bounce, maybe very small, maybe a bit larger as high as 6800. If you have been in on this recent ride down, may be a great exit point. But the key here is the bottom is going to fall out after this bounce. The selling is not over. I'm waiting for the crash. Just something to consider and watch for when you are making your decisions with your nest egg. Wishing you all the best.

[VAmanBulls]

One final thing and I'll shut up. Study the early 2022 crash. We are in a very similar pattern. Note the sell-off on the bounces on the way down.

[PhilJohn]

Looked at some things this weekend and wanted to share my thoughts. Take it or leave it, do your own research. If your a buy and hold guy or a seasonal guy, this is not really for you. I'm more of a swing trader, I look for strong patterns, evaluate risk vs reward and make trades on that. That said, here's my opinion. We are going to see a bounce. Not sure if it will be enough for a small head and shoulders, but I do expect a bounce. I fear it will trick a lot of folks. I am not going to buy-in on any anticipated bounce. This is not a buy the dip situation with our limited TSP trade constraints (order in by noon, etc). This is a buy the crash situation. I'm waiting for the larger crash that I really feel will come. I see a bounce, maybe very small, maybe a bit larger as high as 6800. If you have been in on this recent ride down, may be a great exit point. But the key here is the bottom is going to fall out after this bounce. The selling is not over. I'm waiting for the crash. Just something to consider and watch for when you are making your decisions with your nest egg. Wishing you all the best.

I agree 100%. It is tricky because we are so limited with moves. If you buy a quick little bounce and run back to safety, you are done for the month. making you miss the start of the actual recovery. I wish TSP gave us better flexablity.

[Wind]

fwiw - I watched the live reading for I fund throughout the day recently (but not sure which day that was),.. But it was typical graph advaanced/filled in throughout the day, but at or near the end of the day, I saw that the I fund achieved a completely different result than the graph that had unfolded all day. I think I noticed the conflict by comparison on phone at the end of the day vs watching the graph on computer during the day. After I refreshed the computer, it agreed with the phone and I could not get back to the graph I had watched fill in throughout that day, and have no documentation. I'm not sure what happened.