“ONE” is an imaginary character in this story. This story has a limited version for non-subscribers but it will give you enough information in plain English so you can understand.
One of my friend asked me “What is going on with the stock market” and i explained him and he said, it is too technical and i can’t understand and then i explained him in a kid language and he understood. so i thought, it is the perfect time to write a second story and the story i had explained him both.
Imagine mount Everest has 5 known peaks and maybe some unknown peak higher. A group of friends decided to climb and take a cart with some heavy material up. 1st peak, few got tired, they stopped. The 2nd peak, a few more tired and stopped. 3rd peak same thing. That 3rd peak was sp500 3300 level, 4th peak sp500 3400 level – only 3 friends left -. 1 friend stopped there. 2 remaining tried to get the cart higher but they could not now due to heavyweight and COVID 19 (February 2020) triggered from 4th peak, Cart fell with 2 friends waiting at 4th peak. On the way down, those friends who were stopped at peak 2 and 3 show the cart coming down and they caught it (march 2020 end) and now they are again trying to take it back at peak 4 and 5. 3570 was sp500 peak 5 where all of them got to it. But now those who started from peak 2 and peak 3 again, they bailed out and tired at peak 5 and again 2 friends left to carry the cart into the unknown peak and once again cart fell as 2 could not hold the weight. but the problem now is all the friends are at peak 5 and no one waiting at peak 2 and peak 3 to hold the cart. so only way, now cart will go back up is: getting another group of friends venturing for a similar adventure from peak 1, peak 2, or peak 3.
if no other group of friends, the cart will continue to fall to the bottom of the mountain or until it finds another group. SPY XXXX and XXXX, are peak 4 and peak 3. Peak 3 and peak 4 may have another group ready. if not then the cart will continue to fall.
I highly recommend reading the 1st story to get the background and then proceed further. (Non subscriber will not have access to it but i have included snippet of it in the below paragraph)
https://rakesh.zeusconsulting.net/1st-warning-stock-market-story/
and go through my twitter profile pinned image.
https://twitter.com/purvirakesh/status/1102274221495980032?s=20
Statement from the 1st story (For those who does not have an access).
<<————The second warning may be a final warning (if there is no probability of remaining 2 warnings out of 4 then – which depends on the price action again) to go flat in everything. This is how I am managing my long term portfolio.
In the last(1st story) story, i had clearly mentioned that
“”one should choose to hang on to the leader (suggested once are large-cap ideally) & get rid of the laggard. one can also start booking profit/scale etc or tighten up their stop for their stocks, mutual funds etc… Keep in mind, the stock market still has 9 to 18 months to go = index still can go up to 5 to 15% (Chances are there & i want the market/index to go higher to reach my long term target – it does not mean that one’s stock will also go higher. it depends on which stock one is holding) or so higher & so does one’s stocks (good once). “””. I also said in the 1st warning that If one wants to use cash then watch GOLD, platinum, and silver.
—————————————————————————————————->>>>>
If you had invested in gold or silver in 09/2019 at that time, gold went from 1500 to 2100 by this time and u would have made money.
If you had hang on to the large-cap – you would have made fortune by this time.
The second warning (Not the final one) now arrived as price gave me a signal along with the economic factors. Look at the timing. 1st story was also in September month and now second one also in september month. Still, some factors are missing but it is a good time to issue a second warning. Last time during the 1st warning, as I had said that the overall economic situation is still better but usually, it takes time to go worse & when it does, it will be a second warning sign from me and now it is worsening so this is the second warning sign from me.
But at the time of this second warning, I will not say to anything to buy or sell (1st warning time, i said to hang on to large cap only) but i will say only this time to tighten ur stop on ur stocks (one may choose to get rid of large-cap if they had milked enough profit out of it and hang on to remaining with tight stop) and watch to see if the price takes out peak 5 or not. If it does with revenge then you can try getting on board with the short term mentality of speculation with a small-cap company with growth potential or whatever small company is favorite among individuals in the online or social media with a tight stop. Remember, now you will go towards an unknown peak if peak 5 is broken and we do not know where is the location of that peak is and group can get tired at any time and the cart may fall at any time. That is the risk you have to carry with you if you choose to enter.
I may have an idea of those unknown location (if price choose to clear peak 5) based on some projection and my subscriber will know those levels in advance. Peak 4 and peak 5 was very well projected in way advance on march 2019.
Back in july, i had said this. (if the link is not clickable then copy and paste) https://twitter.com/purvirakesh/status/1283208489792344065?s=20
Another week/period to observe 2/28/2021. Overall price action still way above my levels for bears. so it has to come down to confirm something. Ideally XXXXX
Now here is the flip scenario – e.g. Despite 2nd or 4th warnings, the market decides to go higher & make a run for another 4 years. What am i going to do ??? NOTHING (i will stay happy sitting on cash then going long in the market & pay a premium price for stocks. If one wants to use cash then watch GOLD, platinum, and silver.
One should not come back & blame me if the market decides to go higher after 2nd or 4th warning (Remember we can’t milk an aged cow until he/she dies completely. we have to stop at some point & find a young cow to begin the milking process again. Stock market is like that). but if it goes down as per plan then I do not need thanks either. In that case, I will be happy seeing one happy that one is able to save their retirement & hard-earned money. I will also plan to issue an entry point to put back the money into the stock market after the crash in the future (I am still debating that idea though).
Remember in the end, I am not a certified financial advisor to advise one about anything. I am just expressing my opinion & sharing my observations & rely on history to repeat based on my observation. I am not in the game of guessing or hope & forecasting. I rely on price actions & probabilities & high reward/risk despite warning signs & let price confirm it after the warning. one will act on warning & one will act after price confirms it & both have its advantages & disadvantages. Disclaimer: Do ur own due diligence. my opinion is based on my observation/exp, past history & calculations.
