SPY - for the love of the game
Distribution from institutional hands into retail hands has now been successful accomplished.
”…all the fluctuations in the market and in all the various stocks should be studied as if they were the result of one man’s operations. Let us call him the Composite Man, who, in theory, sits behind the scenes and manipulates the stocks to your disadvantage if you do not understand the game as he plays it; and to your great profit if you do understand it.” — Wyckoff
There are three stages to a bear market, the initial sell off, the relief rally and than a longer period of a down move to shake out retail hands that thought they found the bottom.
This all started during 2018 peak and continued until about 6/8, when max euphoria was hit. You seen articles like, "this guy thinks warren buffett is an idiot, says day trading is the easiest thing ever". With that headline i knew it was time to short the market again.
During this whole relief rally from march lows, you seen an astonishing amount of retail getting into the market. The timing is neither a coincidence nor an accident. If you got back to 2019, you will remember that almost all brokers offered free trading. This was by design to sucker in as much retail as possible. This was the big move to transfer shares into retail hands as the world around us collapsed due to the coronavirus. what they lost on commission fees, was gained 10 fold during the share transfer process. Smart money knew what was coming, even without the virus, we were headed towards a recession. Just part of a time cycle.
Speaking of time cycles, lets go back and analyze 1930 and 1960 - 90 year and 60 year cycles.
During 1930, after the initial sell off, there was a very similiar relief rally. One that defied all odds. That rally lasted for about 100 days and retraced 70% from the initial sell off. followed by new lows being made later on. the relief rally was created by retail with leveraged accounts.
During 1960 we had a great sell off, followed again by a relief rally that went about 75% of the initial sell off, until once again new lows were made later on in the year. Please note that in 1960, the top was on 6/8. It is also no coincidence that we are going through civil unrest and 60 years ago we had the Great martin luther king and his movement. front and center stage.
Now lets look at 2020. after the initial sell off, we had an amazing relief rally, one that retraced almost 90%. some indices did make new highs like the QQQs. With this relief rally, if you go to robintrack.net (this website shows what robinhood users are doing, aka dumb money) you will see that retail has been buying ever dip relentlessly. When buffett said two weeks ago that he was unable to find any value during the march sell off, retail on the other hand said, "im all in".
Now that the transfer from smart money to dumb money has happened, the market will start going down again. Forcing these robinhood accounts, these retail accounts, these weak hands at the mercy of a bear market. Most never seen a bear market before and honestly, i have personally never experienced one. I have however, studied charts day and night going back to 1890 and that is what i learned.
You can expect a longer term period of selling, and it will turn into a blood bath if biden wins, who reportedly will want to take away the corporate tax cuts that trump gave companies. This will cut into company profits and create a huge wave off selling.
A bear cycle normally lasts 5 years. 2 years down, 1 year up and finished by 2 years down.
2020 and 2021 are going to be bear years. 2022 is going to be a year of euphoria.....
"Ecclesiastes 1:9-11
9 What has happened before will happen again. What has been done before will be done again. There is nothing new in the whole world.
10 "Look," they say, "here is something new!" But no, it has all happened before, long before we were born.
11 No one remembers what has happened in the past, and no one in days to come will remember what happens between now and then."
Thank you for tuning in.
”…all the fluctuations in the market and in all the various stocks should be studied as if they were the result of one man’s operations. Let us call him the Composite Man, who, in theory, sits behind the scenes and manipulates the stocks to your disadvantage if you do not understand the game as he plays it; and to your great profit if you do understand it.” — Wyckoff
- The Composite Man carefully plans, executes, and concludes his campaigns.
- The Composite Man attracts the public to buy a stock in which he has already accumulated a sizeable line of shares by making many transactions involving a large number of shares, in effect advertising his stock by creating the appearance of a broad market or a market as a whole.
- One must study charts with the purpose of judging the behavior of the stock and the motives of those large operators who dominate it.
- With study and practice, one can acquire the ability to interpret the motives behind the action that a chart portrays. Wyckoff and his associates believed that if one could understand the market behavior of the Composite Man, one could identify many trading and investment opportunities early enough to profit from them.
There are three stages to a bear market, the initial sell off, the relief rally and than a longer period of a down move to shake out retail hands that thought they found the bottom.
This all started during 2018 peak and continued until about 6/8, when max euphoria was hit. You seen articles like, "this guy thinks warren buffett is an idiot, says day trading is the easiest thing ever". With that headline i knew it was time to short the market again.
During this whole relief rally from march lows, you seen an astonishing amount of retail getting into the market. The timing is neither a coincidence nor an accident. If you got back to 2019, you will remember that almost all brokers offered free trading. This was by design to sucker in as much retail as possible. This was the big move to transfer shares into retail hands as the world around us collapsed due to the coronavirus. what they lost on commission fees, was gained 10 fold during the share transfer process. Smart money knew what was coming, even without the virus, we were headed towards a recession. Just part of a time cycle.
Speaking of time cycles, lets go back and analyze 1930 and 1960 - 90 year and 60 year cycles.
During 1930, after the initial sell off, there was a very similiar relief rally. One that defied all odds. That rally lasted for about 100 days and retraced 70% from the initial sell off. followed by new lows being made later on. the relief rally was created by retail with leveraged accounts.
During 1960 we had a great sell off, followed again by a relief rally that went about 75% of the initial sell off, until once again new lows were made later on in the year. Please note that in 1960, the top was on 6/8. It is also no coincidence that we are going through civil unrest and 60 years ago we had the Great martin luther king and his movement. front and center stage.
Now lets look at 2020. after the initial sell off, we had an amazing relief rally, one that retraced almost 90%. some indices did make new highs like the QQQs. With this relief rally, if you go to robintrack.net (this website shows what robinhood users are doing, aka dumb money) you will see that retail has been buying ever dip relentlessly. When buffett said two weeks ago that he was unable to find any value during the march sell off, retail on the other hand said, "im all in".
Now that the transfer from smart money to dumb money has happened, the market will start going down again. Forcing these robinhood accounts, these retail accounts, these weak hands at the mercy of a bear market. Most never seen a bear market before and honestly, i have personally never experienced one. I have however, studied charts day and night going back to 1890 and that is what i learned.
You can expect a longer term period of selling, and it will turn into a blood bath if biden wins, who reportedly will want to take away the corporate tax cuts that trump gave companies. This will cut into company profits and create a huge wave off selling.
A bear cycle normally lasts 5 years. 2 years down, 1 year up and finished by 2 years down.
2020 and 2021 are going to be bear years. 2022 is going to be a year of euphoria.....
"Ecclesiastes 1:9-11
9 What has happened before will happen again. What has been done before will be done again. There is nothing new in the whole world.
10 "Look," they say, "here is something new!" But no, it has all happened before, long before we were born.
11 No one remembers what has happened in the past, and no one in days to come will remember what happens between now and then."
Thank you for tuning in.
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