The Adorable "Return Free Risk"

JC Parets
June 2, 2022

The bears are getting creative with their theories.

You notice?

And there are a lot of bears out there. More than we've seen in a long, long time depending on how exactly you're counting them.

So the big question is whether we've seen A bottom or if we've seen THE bottom.

And the truth is no one knows until after the fact.

All we can do is continue to collect the data as it comes in and make the best decisions with incomplete information.

The first thing that needs to happen before stocks can go up, is that they need to stop going down.

That's just math.

And what's interesting is that with lower lows in the price of most major U.S. Indexes a couple of weeks ago, fewer stocks were actually able to make new lows....

That's evidence of an exhaustion of sellers. They just weren't able to knock as many down this time.

Meanwhile, the angry permabears are describing this market as providing "Return Free Risk", I kid you not, as reasons to stay short.

How adorable.

They blame things like wars and lack of liquidity, rising yields, drops in earnings and margins, the types of remedial excuses discussed on the evening news.

None of this is new information. It's just gossip among the scared and angry, at this point.

And while all of that is great, the bulls still need to see more stocks making new highs than new lows. Otherwise, this market is still a mess at best, downtrend at worst.

But I will say again that the lack of new lows is certainly step #1. And expansion of new highs would be step #2.

Now remember, it's not just going to immediately show up at the new 52-week high level. That's just not the place to look for now.

Stocks need to earn the right to make it to the 52-week high list. For now, we'll be focused on the 21 and 63 day highs (1 month & 1 quarter, respectively).

After that we'll look to the 126 day highs (6-months)

Bottoms are a process. New uptrends take time to develop.

We can observe what's going on underneath the surface to see which way the tide is shifting.

In recent weeks it's shifted more positively.

This has also come in the face of a weaker US Dollar.

For my money, if you stand any chance whatsoever to make money long stocks or crypto this summer, a weaker US Dollar is a NEED and not a want.

We'll discuss all of this and much more on tonight’s LIVE Monthly Strategy Session.

We got a fresh batch of monthly candlesticks on Wednesday morning, and we’ve already updated my workbook of annotated charts.

Premium Members you can click here to check that out before tonight’s call.

We’ll get started at 6:00 p.m. ET. Be sure to bring questions.

ASC Premium Members, if you haven't already, you can click here to register for tonight's call.

As always, if you’re not able to be with us live, you can access the recording and the chartbook from the strategy session in our archives.

Not an ASC Premium Member? Ping Peter and tell him JC said to hook you up!

See you at 6:00 p.m. ET.

JC

 

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