InvestorsHub Logo
Followers 416
Posts 52354
Boards Moderated 13
Alias Born 12/16/2001

Re: Agoura Guy post# 426

Friday, 09/04/2020 7:10:34 PM

Friday, September 04, 2020 7:10:34 PM

Post# of 2366
The bears fired a shot across the bow, but one or two days is not enough to reverse a strong uptrend. There were already warnings of a correction or pullback because SPY has been more than 10% above its 200-day since August 12th and QQQ has been 20% above its 200-day since July 6th. Of course, overbought indicators are not very good for timing a correction.

In fact, I have yet to find a good indicator for timing a peak/pullback during a strong uptrend.



Thursday’s decline amounted to an outsized loss. The 5.07% loss in QQQ was the largest since the 11.97% decline on March 16th, while the 3.44% loss in SPY was the largest since the 5.77% loss on June 11th. An outsized loss is like a hard right to the jaw. While it may not knock the bulls out, it is enough to destabilize the market for a period.

SPY stumbled for two to three weeks after the June 11th decline. This implies that a correction needs some time to run its course.

FROM ART HILL