If you happen to relate with the title of this post then its time to start taking steps to understand nature of the markets and ensure that next time you are NOT caught by surprise, Isn't it? But we were expecting the sell off, based on what? Charts were already providing the clues, did you look at right places?
The recent sell-off was expected based on the divergences visible in the charts, however the intensity and magnitude was extreme due to COVID19 world wide on-going crisis. Now that we got the pullback, how long will it last and how deep will it go? Let's check the charts for any possible clues.
Observations on Weekly chart below:
Observations on Weekly chart below:
- We were seeing divergences across all indicators for many months as shown by arrows
- Dotted lines are possible support areas
Daily chart is also providing few clues:
- Divergences across all indicators were also visible on daily time frame
- Support area is shown by yellow shaded zone
- PPO reaching extreme level of -5 which signifies probable bounce time or sideways action
- RSI is also in oversold territory suggesting probable bounce or sideways action from current levels
Things to remember:
We expect a near term bounce soon but don't get too excited. This is not over yet and we might see possible next leg down in months ahead. Have patience and use this time to research your approach and learn about the markets.
Good luck!
- This is not time to panic, as market is already in free fall
- This is time to organize and plan ahead to pounce on the buying opportunity once this drop is over
- Identify areas of support and tentative action plan to get in the market aggressively when the right time comes
- Research on how to find this "right time" to get in!
We expect a near term bounce soon but don't get too excited. This is not over yet and we might see possible next leg down in months ahead. Have patience and use this time to research your approach and learn about the markets.
Good luck!