Stock Market: Following the Process
The markets started down today but as of now has turned positive strongly. We may still end up lower on the day even though we are in oversold territory. I stick to following my process in a disciplined manner and not make predictions of what is going to happen. I do not know if we have seen the bottom this round or there is more pain to come. I also do not know if the rest of the year is going to be better than what the year so far has been. All I know is that my actions are in my control. And I will do what the market tells me to do.
Looking at the 1-month SPY chart we can see that the 10-day simple moving average crossed below the 20-day simple moving average on April 13. That was my signal to get out of my SPXL position and I did.
That was when SPY was at 443. Today it is -11% lower and from the chart it can go lower based on the simple moving average indicators. I will only get back in when the 10-day SMA crosses over the 20-day SMA. That will be my trigger to re-enter the market. Till then I wait and watch.
The QQQ chart looks very similar. It was again on April 13 that the indicators told me to get out of my TQQQ position which I did.
The QQQ was at 346 that day and today it is trading -15% lower. Even if this is the low, the reversal per my model will take at least a week or two. For reversal I will be looking for the 10-day SMA to cross over the 20-day SMA. That is when I will get back in TQQQ.