simply saying. I've found that much of the time, those two are not aligned with one another. Why?
They really have no incentive to tell you ahead of time what you should do (especially for free). Additionally, they need to shift their positions fully FIRST and then tell you (the public) MUCH later. So there are all sorts of conflicts of interests. Yet charting can show their footprints and give us hints when they collectively make shifts (long before they alert the public to it). So let's take a look at what I'm seeing now.
For starters, there are some bearish signs that I'm seeing that show that the large institutions are likely "cashing in" their positions and locking in their profits from the bull market/uptrend.
For instance, we see the most aggressive uptrend line (blue line) broken and that's followed by a larger uptrend line (green line) being broken. This happens because "the big boys" are selling en masse at the moment.
Additionally, we see that, so far...the market has held below the green uptrend line, which shows that they don't have a lot of conviction presently on the buy side and have been quicker to hit the sell button.
Also, we see the 50-day moving average (blue moving average line) curling downward. This is screaming extreme caution to any pros who've previously been bullish on the market. Additionally, the RSI and MACD have been losing steam lately too, which causes these former bulls to be more cautious.
So what now? They're watching these zones (black boxed areas) of support (lower box) and resistance (upper, smaller box). Should the upper box be broken, then we'll likely see a temporary rally upward (which just pushes the market to an even greater state of overvaluation. So if the pros are in that move, they know its' just a short-term "trade" and not an investment. So they'll be even quicker to hit their sell buttons en masse because they (unlike the retail investor) realize how overvalued and dangerous this market really is right now.
Ultimately, these bulls know that due to present market valuations (price-to-earnings valuations, etc.), that any rally will likely be short-lived and that the bear market downtrend is likely around the corner (emphasized by the yellow downward arrow).
On the other hand, the black box of support is WAY more important to them because they know this needs to hold in order to keep the long-term uptrend still intact. And if that doens't happen, they know to "look out below"!
If that lower black box doesn't hold (where there's been previous support and the often-watched 200-day moving average), then everyone who's "bought and held" stocks overall for the last seven months are now all collectively losing money. And what happens when masses of people are all losing money at the same time? They panic, lose confidence and sell en masse!
That's what is going to unleash the massive downtrend (in addition to all of the "margin selling" that happens from the margin clerks at the stock brokerage firms for those who are trading on margin and are losing money).
It will get very ugly. Most are not prepared for what's to come. They have NO idea. The length of the present bull market has made them numb to even the thought of a true market decline.
Yet my subscribers are prepared for this next market decline and will know when to get back in and they'll have the resources set aside AHEAD OF TIME to benefit from it. I hope you will to. So if you're not a subscriber to the Logical Investor newsletter, come join us! There's never been a more important time to gain insight/direction into your stock portfolio, 401k, IRA, etc.
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