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. The S&P 500 daily chart on Sunday, as shared in the Market Pulse Premium newsletter issue I sent out in the evening.](https://substackcdn.com/image/fetch/w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F750d1f23-cba8-4e91-8a8e-a596e27864b7_675x576.jpeg)
Let’s see what this chart looks like now.
![](https://substackcdn.com/image/fetch/w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F23a29a81-e7d8-4951-91b9-32a41402b1d6_939x583.jpeg)
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.
![Chart: S&P 500 sell-off from the start of August 2023 to the end of October 2023 with the Bollinger Band indicator. Daily chart. Chart: S&P 500 sell-off from the start of August 2023 to the end of October 2023 with the Bollinger Band indicator. Daily chart.](https://substackcdn.com/image/fetch/w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F1349a3e1-612e-4146-ab70-9e316687353b_669x573.jpeg)
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?