Analytics of the market are predicting correction in progress.
Lets hope correction doesnt turn into that other awful C-word. Sessions with one major stock index closing higher while another finishes lower have become more frequent, and that doesn’t reflect a healthy market. Though recent divergences aren’t as extreme as those seen in March 2000, they are nevertheless much higher than the norm. Right now the divergence is at 1% point difference. In 2000 it was at 2%.
Market crash signals:
1. If a strong early rally reverses direction by the end of the day.
2. The buy-on-the-dip strategy is failing.
3. Prices falling is the last indicator of a crash the first happens weeks ahead. The catalyst could be something like China delisting companies. The Fed stopping its bond buying.
Inflation going too high. Or all of the above.
4. Cryptocurrency starts moving in tandem with the market dips.
How to profit from the market crash:
1.Sell long positions and move into cash until the storm has passed.
2. Buy puts on the S&P 500.
3.Buy inverse ETFs.
4. Short individual stocks.
You also must know how much pain you can accept (i.e., risk tolerance). If you can handle a 30% or 40% downturn, then stay the course. If not, move to the sidelines.
Market crashes arent necessarily bad but should be seen as buying opportunities. Except for China stocks since US is now imposing regulations against them and China could continue with more. They have lost 1 trillion dollars in value since February. There is no upside or reason to be buying Chinese stocks right now.
Market crash signals:
1. If a strong early rally reverses direction by the end of the day.
2. The buy-on-the-dip strategy is failing.
3. Prices falling is the last indicator of a crash the first happens weeks ahead. The catalyst could be something like China delisting companies. The Fed stopping its bond buying.
Inflation going too high. Or all of the above.
4. Cryptocurrency starts moving in tandem with the market dips.
How to profit from the market crash:
1.Sell long positions and move into cash until the storm has passed.
2. Buy puts on the S&P 500.
3.Buy inverse ETFs.
4. Short individual stocks.
You also must know how much pain you can accept (i.e., risk tolerance). If you can handle a 30% or 40% downturn, then stay the course. If not, move to the sidelines.
Market crashes arent necessarily bad but should be seen as buying opportunities. Except for China stocks since US is now imposing regulations against them and China could continue with more. They have lost 1 trillion dollars in value since February. There is no upside or reason to be buying Chinese stocks right now.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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SugarMoon : Sir, I am confused, one of your post yesterday:
Heres the best way to invest this December:
1. Dont sell any of your shares. Hold and hope the market rebounds which it usually does.
But today your point 1 here:
Sell long positions and move into cash until the storm has passed
So should I sell or hold? Especially CCXI
Money come 88 : I guess one day only situation already changed
tonetizzle : was buying puts on spy this week
Mcsnacks H Tupack OP SugarMoon : This is if it turns into a market crash. In a correction you should do the other.
Mcsnacks H Tupack OP SugarMoon : A correction is the markets dropping 10%. A crash is the markets dropping more than 30%. Right now the S&P500 is down 5%. The Nasdaq is down 6%. The Russell3000 is down 10%. Bitcoin is down 9%.
SugarMoon : Should sell upon a index dropping more than 30% over the course of a few days? Or the total declined percentage across the indexs? And sell all including those in reds?
Conn_00 Mcsnacks H Tupack OP : Hi Master, I'm newbie here. May I know if the market is in the correction or crash, is it a good chance to buy more in dip? Then wait for market to recover & the stocks will go up? Or don't buy any stocks during market correction/crash, wait till it gradually recover just started to buy stocks?
Mcsnacks H Tupack OP SugarMoon : The best thing to do is look at each stock and think how much am I willing to be down before it’s too much for me to handle.
Mcsnacks H Tupack OP Conn_00 : Best thing to do is only buy stocks that are at new lows. And to make it easier, Buy in blocks. Like don’t go all in at one time. Buy in then wait a day or two and if it keeps going down buy some more. That helps with anxiety and keeps people from panicking.
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