The Daily Market Forecast... contrary is good

Friday’s Blog Results: The suggested short stopped out for a 4.25-point loss (per contract). The long didn’t trigger.

Quick Tip: Contrary is good.

The Wall Street definition of a correction in the market is a 10% drop from the high. All indexes but the Dow did that last week. A possible short-covering rally late in the week repaired the situation.

What’s next is anyone’s guess but looking at evidence from past performance can be useful. Here are some interesting S&P statistics that may help you with your long-term portfolio plans (day traders don’t care about this).

In the past 33 corrections the S&P went on to Bear territory 7 times. The other 79% of the time it reversed to new highs.

The average correction was -15%. We hit that last week. The average Bear market was -36%.

Moving over to the Dow, in the past 29 events of global crisis (think wars, terrorism, Covid, Ukraine), the average drop was 11.6%. After 3 months it was up 11.3%, 6 months up 15.8%, 12 months up 24.7%.

Today’s Best S&P Futures Turning Points:

Short Level: Sell 4363.50 stop 4369.25.  

Long Level: Buy 4181.25 stop 4175.50.

Trade well,

Mike Siewruk

P.S. Tired of trading alone? Need more quality setups? Join our team of great traders and accelerate your performance. Copy down this coupon code WINTER2022 and save 100 per month for life on your membership. Click here for FREE video training and details.