Buying Opportunity

2022년 1월 9일

The pullback is not unexpected. I think this presents the opportunity to load up and buy some more. As you can see the trend is still intact, although at the lower time frames we can see that we are in a range.

Possible Outcome #1:
My first guess its that it will pull back to the trend line, which is about 2-3 % away.

Possible Outcome #2:
My second and most favorable guess is that the market stays in this range and bounces back to the middle path of the long trend of the past year.

Trade Setup:
I recommend a 1/3 of a full position at this level. If we bounce I recommend filling another 1/3, and adding another 1/3 at the breakout of the sideways channel.

If we move lower from our current level, I recommend to keep that 1/3 position, and not add to it until it bounces past the lower sideways channel.

Fundamentals:
I do believe it is a concern to the market and valuations the fact that the FED indicated higher rates. However, it is my dear opinion that we will not see higher rates. It took 8 years after 2008 for the Fed to raise rates beyond 0%. Granted, you might say that we didnt have any inflationary concerns between 2008-2016, which is true but it should give an indication at the speed the Fed moves. Additionally, through 2008-2016 the market priced in extremely high probabilities of Fed rates, which were all ultimately wrong.