Stock Market Analysis

Monday, March 26, 2018

How's Easter Week Like in the US Market?

Welcome to Easter Week!

Yes, this is going to be a holiday shortened week with Good Friday holiday on Friday, going into Easter weekend!

So, how was Easter week typically like? Well, its typically a positive week, even within a bearish market. Even those times the US market did not close positive on Easter week, it didn't quite close a significant negative week either, mostly a sideways kind of week. As such, going by historical characteristic, I would say odds of the market closing positive this week is very high.

Indeed, a positive close is very likely due to how much the US Market was hammered down in a single week last week. Yes, I didn't see that coming. The brewing trade war between US and China has historically sparked severe volatility in the US market and once again, it is repeating that same pattern right now. However, such things has always ended in some kind of compromise that allowed all parties to move on positively... is that going to be the case this time round with hard handed Trump?

Looking at the technicals, what was shaping up as a classic bullish reversal out of an intermediate correction failed miserably, sparked first by the sudden implication of Facebook in the election scam and then the trade war thing. This failure is a very critical and dangerous one. A failed reversal tends to lead to more severe downside tests which rekindles the intermediate correction. Yes, we are officially back in the correction. The February low is going to be very very critical. If the US market fails to hold up and breaks the February low, this could lead to a very extended intermediate correction the kind we saw back in end of 2015. But no, I do not think this is the start of the long overdue market crash as its still too early and the pieces are still not totally in place yet.

However, due to how short term oversold the market was last week, I do not see why this week, coupled with the Easter week tendency, not be a positive week. However, I would be very very careful not to take this opportunity to go on the long side yet... this is still no time for high probability directional trading. This is of course when multi-directional trading shines the most, options strategies that works in all directions at the same time without having to pick one direction. If you wish to learn one such strategy, check out where I teach you how to make 5 to 15% A MONTH in residual income under all market conditions.

For now, the market turns a short term bear trend within an intermediate neutral trend within the framework of a primary bull trend.


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