Trading SPX Cycles

[northam43]

That is exactly the wrong thing to do. Any financial savvy individual would never give that kind of advice.

1. By selling and taking a loss, I would get no compensation for it, I have to abide by the IRS tax laws to be able to get a tax write off, otherwise it would be a wash sell and you get nothing. If I was trading in an IRA account and sold, it would be a total loss (because you can't take a tax write off in an IRA), and then what would make it worse, if after I sold and the market recovered that would even be more depressing.

2. After I sold and toke my loss, basically giving my money to the day traders. But then what would I do with the money? Leave it in cash? Buy bonds? or listen to somemore bad advice.

Day trading is not my style of trading. Matter fact most of them don't last very long. Most of them don't even play with their own money, they trade on margin, which is borrowing the money and paying a low interest rate for the use of it, to try and make a quick buck, by buying puts & calls. I'm a long term trader, I put my money where my mouth is and holding longs during a Bear market to me is an investment for the future, when this Bear is over and it won't last as long as some believe. Day traders lean alot more to the Bear side. Why, because the Bear is faster and meaner than the Bull and a day trader wants to clean out your pockets as fast as they can, and in a Big Bear they will go back for seconds. But when the bottom is hit and the Bull comes back, I will already have established long positions and over time those positions will become profitable, to me it's an investment.

The history of the SPX has shown that the Big Bear only comes after a record SPX high has been made. Small Bear's occur when a new high has not been made and they last between 1 to 8 months and decline between 19% to 36%. So far this Bear is in the 2nd month, and has declined less than 20%, the high was 1370 and the low thus far has been 1101. A 36% decline would take the SPX to around the 870 level, that would be about a 500 point decline.

Here is an illustration comparing the last leg of the 2008 Bear, with the current Bear market. I have put an asterisk, where I believe we are currently at. In comparison with the 2008 Bear, this Bear is faster, I expect we will be at the bottom by the 1st part of November.

In order to cushion the downside, I use SPXU, as of today my SPXU positions are up 14.87%, the SPXU is 3x the inverse of the SPX, so a little dab will do it. I will never exceed 50% of my portfolio in SPXU, and I will only use SPXU at the beginning of a Bear market. The low in an average Bear market is normally established by the 2nd month, so that could possibly be this month, but I (my own personal opinion) doubt it, I'm looking at November as to where the bottom will be. But the Bear will be in place until the Monthly EMA 3/8 confirms a Bull crossing, then we will all know when the Bear has ended for this cycle and then when the next record SPX high is made, then is when we will get a Big Long Bear. Of course the historical pattern can be changed. But for any system that works off of patterns to project such a thing. It obviously is not the system but the individual's desire for it to happen.