COVID Crash Predicted by TA - Price Precedes News

6月10日

TA will always predict market crashes ahead of time, even black swans. I am suggesting that charts and some other factors are currently indicating that a market crash is imminent. The news that takes it down is irrelevant, the distribution has already taken place. FOMC could be a potential catalyst this week among other things such as global conflict and bank failures.

One of my primary strategies is to use Dow Theory, which has several parts to it. The part I focus on is the idea that stocks move together in trends, they have primary and secondary trends, and some minor ones. The primary trend will always take presence over a secondary or minor one, but that does not mean significant corrections can't be had while in a primary uptrend. Price moves in this way because of accumulation and distribution. If you see a bearish chart patterns on all major indexes and nearly all of the mag 7, you can be pretty sure there may be some downside to come. The more confluence you have the better, stocks move together in trends, so if you can identify those trends and understand them, you can trade accordingly.

Dow Theory and similar theories such as Wyckoff distribution have been the cornerstone of every legendary trader of the last 100 years or more. It worked 100 years ago, and it still works today. I don't see many retail traders ever mention this. Sure, they say the trend is your friend and things like that, which I agree with. However, most folks never talk about why the trend is your friend. The reason is because of wholesale stock operators and accumulation and distribution. The market will always function this way, unless there is a complete overhaul of the entire stock market and fundamental changes to everything. Nothing else matters, this is the true reason prices move the way they do.

Here's a story I find very helpful for understanding this concept.
trade2win.com/threads/the-parable-of-uncle-joe-how-the-stock-market-really-works.26806/

Here's more on Dow Theory:
investopedia.com/terms/d/dowtheory.asp

And Wyckoff:
investopedia.com/articles/active-trading/070715/making-money-wyckoff-way.asp

And one more thing, I should mention Jesse Livermore. He is considered to be one of the greatest traders to ever live, and he was a wholesale stock operator. You can read the book based on his experiences throughout his career:
amazon.com/Reminiscences-Stock-Operator-Edwin-Lefèvre/dp/0471770884