It has been nearly a year since the stock market correction began, and the ongoing battle between bullish technical improvements and bearish fundamentals continues.[0] If the “bear market” is “canceled,” soon we will know.[1] To confirm whether the breakout is sustainable and the bear market is canceled, a pullback to the previous downtrend line that holds is crucial.[1] Making such an adjustment could have multiple benefits, such as reducing the overbought state of the market, modifying previous resistance into support, and replenishing the positions of market shorts in order to propel a rise in prices.[0] The final piece of the puzzle, if the pullback to support holds, will be a break above the highs of this past week, confirming the next leg higher, with 4300-4400 as a target in place.[1]
The current signals suggest an increase in equity risk, but we need a set of rules to navigate whatever happens next.[1] If the market correction violates all of the supports, such will suggest the “bear market” remains intact and the rally from the October lows was another “head fake.”[1] Contrarian investors benefit from everyone else placing bets on the same side of a trade, as this creates an excess.[0] Everyone expects the Fed to cut and politicians to panic via more stimulus checks, rebates, and debt forgiveness, at the first blush of recession, but with a deeply divided Congress, the inflation experience of the last endeavor, and no financial stress, such is unlikely to happen.[2]
This week, Steve Reitmeister shared a brand-new live presentation to investors at the MoneyShow’s Online Expo that reveals his updated latest market outlook and trading plan.[3] The presentation is a must-watch for investors wanting to not just survive, but thrive in the days and weeks ahead. Steve is better known to the StockNews audience as “Reity”, and he shares his 40 years of investment experience in the Reitmeister Total Return portfolio.[3]
The Market Pinball Wizard members knew that when the market hit its lowest point of 3500SPX on October 13th of 2022, they should look towards the 4100SPX region for the beginning of a potential rally.[4] The day before the market bottomed (October 12), I sent out an update to our members noting that the market had made several attempts at hitting the blue box support region on the 60-minute SPX chart, and each time, divergences continue to grow.[4]
0. “The Correction May Have Started, Will Bulls Remain In Control?” Real Investment Advice, 14 Feb. 2023, https://realinvestmentadvice.com/the-correction-has-started-but-will-the-bulls-remain-in-control
1. “Bullish Signals. Bearish Outlooks. – RIA” Real Investment Advice, 11 Feb. 2023, https://realinvestmentadvice.com/bullish-signals-bearish-outlooks/
2. “Here’s what needs to happen for one of Wall Street’s biggest bears to flip bullish and be won over by the stock market” Yahoo Canada Finance, 12 Feb. 2023, https://ca.finance.yahoo.com/news/heres-needs-happen-one-wall-134500507.html
3. “Updated: Bear Market Game Plan” Entrepreneur, 11 Feb. 2023, https://www.entrepreneur.com/finance/updated-bear-market-game-plan/444844
4. “Sentiment Speaks: The Most Important Thing To Know About The Market Right Now” Gold Seek, 7 Feb. 2023, https://goldseek.com/article/sentiment-speaks-most-important-thing-know-about-market-right-now