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Analysis & Learning

Stock market trends

December 6, 2021

I don’t feel like recommending anything at the moment. At some point this market will bottom out. Maybe that has already happened. There are some signs that shares are trying to build a base but I need more than that to make me take the risk. It is so easy to lose money in a falling market. There are loads of exciting companies around. Innovation in technology is proceeding faster than ever. Investors may be more cautious about valuations in future but there is no reason to suppose that when this bear market ends and the next bull market begins it won’t be as exciting as the last one.

The leveraged ETFs that I love are being slammed. QQQ3 (roughly tracks the Nasdaq 100) is down 58.5pc from the January 2022 peak. The Coppock indicator for QQQ3 peaked at 338 in August 2021 and is currently 65, well on the way to becoming negative. This is another one which is going to look very exciting on the next buy signal.

Also Coppock indicators are a bit like Alexandre Dumas’s Three Musketeers – all for one and one for all. When the Coppock indicators start turning higher for instruments like QQ3 it will be time to start turning bullish across the board. I don’t know when that is is going to happen; it hasn’t happened yet; and bear markets can be most treacherous in their later stages.

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