Market Pulse Premium: Bounce

A quick but important follow-up to the previous issue.

So this is a quick follow-up to the Market Pulse Premium issue I sent out on Sunday evening.

In it, I wrote that I expected a bounce this week and I think this bounce has legs until around the mid Bollinger Band line.

These were the probabilities I gave for this move:

What are the probabilities? Here’s what I think:

• Bounce next week (65%) / Selling continues over the next week (35%)

• Bounce in two weeks (85%) / Selling continues over the next two weeks (15%)

The past two days have shown that this was the right call.

Below is the chart I shared in that issue for the S&P 500. This is a daily chart.

The S&P 500 daily chart on Sunday, as shared in the Market Pulse Premium newsletter issue I sent out in the evening.

Let’s see what this chart looks like now.

In line with my prediction, the S&P 500 prints two green daily candles since Sunday’s Market Pulse Premium issue.

Perfect!

So where are we headed to next? Here’s another look at the chart I shared last issue showing how the S&P 500 moved in a down market from late July to late October.

S&P 500 sell-off from the start of August 2023 to the end of October 2023 overlaid with the Bollinger Band indicator. Daily chart.

Be prepared to see choppy movement like this, if we’re really in the start of a major downtrend (which I think is likely to be the case).

What are the probabilities of this?

• Major downtrend for the next quarter (80%) / Bull market returns after this bounce (20%)

Why do I think so?