In the 2000s bear market, the biggest rally came in spring 2001. The Nasdaq bullish percent positively diverged, while the S&P 500 did not. In short, not only was there no "max pain," but there was already some bullish or at least not "peak bear" signal from this indicator. Then at the low, the S&P 500 Index positively diverged, while the Nasdaq did make a new low in both stocks and bullish percent.
In the 2008 bear market, the largest rally in spring 2008 came with positive divergences in bullish percent, but off new lows. The 2009 low showed extreme divergence of price and bullish percent.
Here we are now. Nasdaq has led down as in 2000 and it is already exhibiting signs of a positive divergence. Is the big rally coming soon and further, could the low before this rally already be in?
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Could FXI or CHIX be showing us some bullish divergence? Am still scared to buy though, because of Baizuo bad intentions.
ReplyDeleteMy hunch is it would rally with the Nasdaq, but stocks like ARKK would probably outperform in a rally anyway, my guess is biotech would do better. My sense is they've really hurt themselves with the lockdowns too, right now I am thinking short yuan again once this rally is done.
Delete“they've really hurt themselves with the lockdowns too,” - I *suspect* they used it as an opportunity to stress-test their ability to feed/operate whole cities in the event of a bioweapon attack far worse than Covid (which we know was grossly exaggerated for various reasons).
DeleteAlso, there’s a chance the Baizou will eventually trigger a response against “decision centers” outside Ukraine. https://www.zerohedge.com/military/ukraine-successfully-hitting-russian-command-posts-new-rocket-system-pentagon
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