Will 2022 ~ 23 require a different strategy for traders / investors? Part III


Q: 2022 Analysis

First quarter data suggests that an overall positive / upward price trend is likely in 2022, with a 29-year total monthly sum totaling 37.94. Divided into annual earnings, this translates into an expected gain of $ 1.30 in SPY in the first quarter of 2022.

The Total Monthly NEG (negative) range appears to be more than double the Total Monthly POS (positive) range. However, we could see some price volatility in the first quarter of 2022 which will surprise the markets. For example, maybe the US Fed is making surprise rate hikes? Maybe it’s related to another foreign market event disrupting US markets? I don’t know what it will be, but I think a market event in the first quarter is likely, and that event could cause quite a large downward price rotation in the SPY.

Overall, I believe Q1 2022 will end slightly above Q4 2021 end levels and could see the SPY attempt to break above $ 490-500 with higher profits and continue with the price phase. bullish market.

Analysis Q2: 2022

The second quarter looks a bit more stable in overall price appreciation trends. The data shows a shallow NEG value compared to a moderately strong POS value for Q2. For this reason, I think the second quarter of 2022 will slide into a relatively strong upward melt-up type trend after a potentially volatile Q1: 2022.

The value of the total monthly sum is higher in Q2 than in Q1, suggesting that Q2 may show stronger bullish momentum as a more apparent trend direction sets in after volatility in Q1.

The US Fed will likely attempt to aggressively reduce its balance sheet throughout the second and third quarters of 2022 if my expectations are correct. This may create additional market volatility in Q2 and Q3 2022 – but I suspect the US Fed will attempt to conduct much of this activity in a relatively calm manner – almost behind the market strength / trends.

Analysis Q3: 2022

Q3 shows data which is somewhat similar to Q1 overall. I interpret this data as showing moderate uptrend strength in the typical US market stagnation trend in mid-summer. Mid-summer trends tend to be a bit more sideways. Many traders are on vacation, taking advantage of the summer weather, and / or not paying attention to market trends and dynamics. For this reason, I expect the months of July to September 2022 to be relatively calm and mundane.

Additionally, we have held the midterm elections in the United States in November 2022. The months of July through September will be filled with political positions, campaigns and various events filled with antics to keep the markets from concentrating. on the real issues. As a result, election years tend to be rather quiet, especially in the 2-5 months leading up to the actual election date.

The end of Q3: 2022 and the start of Q4: 2022 could see a larger and more aggressive price trend. Elections, accelerating the start of the holidays / Christmas and the end of summer may cause traders to look to undervalued assets or other opportunistic trades looking to overcome a year-end trend. Right now, it might be the perfect time to identify some strong swing / position trades to close 2022 with nice profits.

Analysis Q4: 2022

Q4: 2022 shows very strong uptrend potential, with POS results significantly exceeding NEG results. Historically, this is due to the traditional phase of the Santa Claus rally in US markets and could play a significant role in 2022 if the US economy remains strong through 2022.

Overall, I expect the US Fed to act in a way that supports the “transition” of global markets away from excessive risk while trying to bring inflationary trends down. There is talk of the US Fed taking aggressive action to fight inflation, but I see the Fed’s actions being more subtle than brutal at this point.

I think the US Federal Reserve is well aware of the fragility of global markets after many years of excessive easy money policies. In my opinion, the current market environment is more similar to that of the late 1960s and 1970s than it was to the 1990s and early 2000s. We have seen a massive influx of capital into the markets. global markets – pushing all traditional economic measures ‘off the charts’ after the COVID event. This capital will work on its own throughout the global economy, further disrupting the capacities of companies and countries at risk, while sparking a component of moderate growth for many years to come.

The main thing was to discuss the opportunities to overcome the current excessive price volatility and adopt a trading strategy more suited to the larger and broader market price trends. In 2019, I warned that 2020 is likely to be very volatile.

In February 2021, I warned that 2021 could be very volatile for certain market sectors: WILL 2021 PROMOTE A BIG ROTATION OF SECTOR TRENDS? – PART I

At the beginning of January 2020, I warned that the US markets could be set up for a “cascade sale”: ARE WE SET UP FOR A CASCADE SALE?

Today, I suggest that price volatility will likely peak in 2022 or 2023 and begin to subside as the excesses of the past 8+ years continue to unfold through what I call the ‘phase. transition ”markets. This market phase is rather a phase of deleveraging and reassessment that began in February 2020 – in various sectors. It has now spread to many global economies where excessive risk factors are addressed and reassessed (think China, Asia and other regions).

This transition process will likely continue into 2022 and 2023, meaning traders need to be prepared for increased price volatility and adopt a trading style that will allow them to profit from these larger trends. That’s why I suggest taking a top-level approach to trading in the next 24-36 months.

There are certain market trends that will always allow traders to make fantastic profits as sectors and various undervalued symbols gain momentum. Overall, however, I think 2022 and 2023 will be moderately difficult for short-term trading strategies and that a higher-level, longer-term approach can be a much more beneficial approach.

Want to know more about my long term investment strategy?

My Technical Investor strategy is particularly suited to this type of trading style. It’s simple, longer-term, and goes beyond the moderate price volatility that disrupts many short-term trading strategies.

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