With that said, if you’re a trader taking advantage of this volatility then the following charts are those we’d watch to determine if the recent bounce can continue.
We’ve been talking a lot about our expectations for continued volatility and what conditions we’d need to be bullish stocks again.
In this post, we want to step back and see what some of the longer-term weekly and monthly charts are suggesting for stocks and the other major asset classes.
Last week we outlined why the risk remains elevated in stocks and updated our forecast for continued volatility.
When markets go through periods of elevated volatility/stress, many market participants look to catch the exact bottom, but a better approach in our view is to buy on the way back up!
Last week we looked for a counter-trend rally in stocks and we got it. The Nifty 50 rallied 20% from its intra-week low to its intra-week high, leaving a lot market participants asking if Indian stocks are out of the woods.
In this post, we’re outlining why our defensive stance remains and how we’re approaching the weeks ahead.
Although we’ve not seen those developments yet, US Stocks (S&P 500) is back above its December lows and other foreign indexes have started to catch a bid in the near-term. This subtle improvement is suggesting some trade opportunities could develop on the long side for those who hold positions for a few days to a week or two.