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Monday, May 16, 2022

The bull in the parade?

Investors in the bear market have been dragged to the border like a moth on fire. And as they were about to enter the bear market below 3,855, there was a rally at the end of Thursday. It extended further on Friday, rising to 4,023.89. Is this just a bear market rally or is it really the end of this dramatic 4-month correction? This discussion will form the basis of today’s commentary on the value of POWR. Read below for more details.

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(Please enjoy this updated version of my weekly comment from the POWR Value Newsletter).

2 different ways to the stock market from here: 5/6 Let’s go back to our previous comment a week.

A long article that speaks to what it means to break below 3,855 in the bear market against the bull market rebound.

It is not surprising that the shares reached 3858 before adding support, leading to a gain of + 4.3% at the close on Friday.

Unfortunately, this support is not proof that the bear market threat is over. On the other hand, the commemoration of the unpleasant correction of 2022 may be very well.

This leads to a new fork in the road with 2 potential routes. Let’s look at these possibilities that are almost identical in my book:

Bulls in parade: FOMO rally

Imagine a 2-3 week long rally in which stocks rise every day. First the bears bear. But little by little, they succumb to the fears of FOMO.

In addition, all the dry cash will start to come out.

It is not uncommon for stocks to rise 10-15% over this period and fall short of all key moving averages, with the bull market no doubt in the lead again.

Before you get too excited, we need to look at another similar illustration that will soften your enthusiasm

Consolidate here and postpone the bull / bear finish

Keep in mind that relief is usually + 3-5% before testing low again. And that’s roughly the amount of rebounds we’ve received from Thursday afternoon to the end of Friday.

So it is not hard to imagine that we are spending time in the trade range between the border in the bear market at 3,855 and 4,100.

This means that the bulls and bears have been fighting for a while before making a final decision on whether we will face territory in the bear market or whether the bull will appear again.

We all like the previous option. And he can even make logical demonstrations as to why this is so much the result.

Unfortunately, the combination of high inflation and the Fed’s hawk is not the most favorable environment for stocks.

This is not the guarantee of the bear market … but the fertile soil that contributes to the growth of bear conditions.

Add it all up and it’s not too far from the different ways we discussed last week. And it makes us wait.

If the bull had stretched from here, there would still be some of the most attractive stocks in the portfolio that have shone over the past two days and thrive further in this environment.

If any stock does not disassemble its previous red arrows quickly, the stocks will be replaced with green horizons.

If we still become a bear market, as we said last week, we know how to become more defensive.

We value investors who generally understand that patience is a virtue. And you have to lean on the tank of this patience to move to the next stage of the market.

Stay calm and move on!

What to do next?

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All the best!

Steve Reitmeister
StockNews.com Chief Executive Officer and POWR Trading Service Editor

SPY shares closed at $ 401.72 on Friday, up $ 9.38 (+ 2.39%). Since the beginning of the year, the SPY has declined by -15.16%, compared with a 1% increase in the S&P 500 benchmark index over the same period.

About the Author: Steve Reitmeister

Steve Stocknews is known to audiences as “Reti”. He is not only the CEO of the company, but also shares his 40 years of investment experience in the Reitmeister Total Return portfolio. Find out more about Reeti’s past along with links to its latest articles and stock quotes.


Message The bull in the parade? Appeared first StockNews.com


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