Beware The Bull Trap

[] The market experienced a late-day rally, and many people shorting this market may have run for the exits. The lesson remains simple: Define your risk and beware of Bull Traps. [View in browser]( . The market experienced a late-day rally, and many people shorting this market may have run for the exits. The lesson remains simple: Define your risk and beware of Bull Traps. [View in browser]( . . [] [Havens Investment Letter] [] [Havens Investment Letter] [] [] [] 70% Win Rate Trading the Crown Jewel of Tech Stocks That is the power of the remarkable system that California tech genius Micah Lamar calls "the Perfect Apple Trade." Recently, he even identified a 30% on AAPL over four days, even while the S&P 500 tanked. [See this incredible system in action here]( [] --------------------------------------------------------------- [] 70% Win Rate Trading the Crown Jewel of Tech Stocks That is the power of the remarkable system that California tech genius Micah Lamar calls "the Perfect Apple Trade." Recently, he even identified a 30% on AAPL over four days, even while the S&P 500 tanked. [See this incredible system in action here]( [] --------------------------------------------------------------- [] [] Beware The Bull Trap [Garrett Pic]Dear Investor, So, it turns out that the $15 puts on Ford that I discussed surged in value. On Thursday, Ford Motor Company (F) shares plunged to as little as $14.57 at the lunch hour. Then, the market turned on a dime, and Ford stock popped back to $15. Buying opportunity for Ford and the rest of the market? No… not yet. As I’ll explain, the market’s negative momentum dictates that institutional capital is pulling toward the sideline. But just a little bit of short-term buying or short-covering can create little rallies known as “Bull Traps.” Today, I want to highlight what you need to know, and why shorting Ford is a better bet right now than going long. But, again, it all comes down to probabilities and understanding momentum. The Bull Trap and Technical Stair Steps As I noted, momentum turned negative on Tuesday after a steady outflow of capital dating back to April 1. However, if you look at this SPY chart (The ETF that tracks the S&P 500), you’ll see that the index uses its 20-day moving average as bottom-line support for an upward move dating from March 16 to March 30. [SPY]( Click to enlargen This rally was rather incredible. And it fueled a dramatic reversal that started on the first. Now, I’m not drawing channel lines that show upward and downward support. But you can see as the market climbed during those two weeks, we saw higher highs and higher lows. The market continued to find support during selloffs and would take another leg up upward. Once momentum turned negative earlier this week, we saw the opposite. Lower highs and lower lows. And those lower highs are what tend to define a “Bull Trap.” A stock or index can break above one of the defined support levels and signal that it’s time to buy. However, what can happen is that a short-term rally is a reason why many people come in off the sideline, only to be trapped. Their buys can fuel a loss pretty quickly as the market reverses and follows its ladder-down step pattern. Back on January 13, market momentum went negative. I circled it on the chart with the skills of a kindergartner... [SPDR]( Click to enlargen As you can see, there are multiple upward blips along the way down. See the red arrow, also drawn with toddler-like skill? Those are little bull traps along the way down. Momentum didn’t go positive again until around January 28, when the insider buying/selling ratio was at its most substantial level since March 2020, according to SECForm4.com. When momentum goes negative, it can and should take capital a lot of time to move off the sideline and back into stocks. We’ve seen over the last week that just a little bit of volume can drive stocks up in a short period. Unfortunately, this weak volume REALLY means that many retail and institutions are not interested in buying too many stocks. The value of measuring broad market momentum is that based on volume and price movement, it is an excellent time to move in off the sideline. Add that to a strong insider buying/selling ratio (a measurement of what company executives do with their own money). You can take confidence in buying back into the market. The weakness in this market is especially pronounced by selling pressure in the Mega Cap stocks today in Meta Platforms (FB), Amazon (AMZN), and even Alphabet (GOOGL). All are fine long-term investments, but if you’re looking for an entry point, remember that you’ll be able to buy for less if momentum remains negative. I’ll let you know when the momentum is bullish once again. But, for now, exercise patience and remember that cash is your best friend. A Quick Word on the Fed As I noted yesterday, we lack enough data on the Fed’s quantitative tapering program. As a result, we can only go on the Fed’s previous tapering efforts to estimate what the future might hold. The central bank announced that we’d see a VERY aggressive liquidity reduction by the Fed in the months ahead. It will be EVEN FASTER than what transpired in 2018. The Fed ramped up its monthly reductions to $50 billion over nine months. In this case, it will ramp them up to $60 billion in just three months. As a result, we’ll also see a reduction in mortgage-backed securities and far more rate hikes than expected. In 2018, the S&P 500 experienced a decline of about 6.5%. However, it’s important to remember that the final month of the year experienced a peak to trough decline of nearly 20%. I cannot tell you if or when that sort of decline will occur. However, before March 2020, that was the most significant downturn for the market over the previous decade. It appears to have been directly linked to Fed tightening AND a major geopolitical event around tariffs. Given that we have a major geopolitical event, generational inflation, a gauntlet of overpriced stocks, and a Cape Shiller S&P 500 ratio higher than most of the downside of the Dot-Com bubble, I urge extreme caution. If momentum goes negative (it’s negative now), I like to hold as much cash as possible. A 2018 downturn would come AFTER I receive a signal, and while we might experience a few percent loss, “moving to cash” and waiting it out is far better than trying to time the bottom. I hate to lose more than I like to win. That’s why I focus so much on playing defense in the markets. And it’s why I follow institutional momentum and insider buying like a hawk. Enjoy your day, [Garrett Sig] Garrett {NAME} Chief Analyst, American Markets [] --------------------------------------------------------------- [] [] Beware The Bull Trap [Garrett Pic]Dear Investor, So, it turns out that the $15 puts on Ford that I discussed surged in value. On Thursday, Ford Motor Company (F) shares plunged to as little as $14.57 at the lunch hour. Then, the market turned on a dime, and Ford stock popped back to $15. Buying opportunity for Ford and the rest of the market? No… not yet. As I’ll explain, the market’s negative momentum dictates that institutional capital is pulling toward the sideline. But just a little bit of short-term buying or short-covering can create little rallies known as “Bull Traps.” Today, I want to highlight what you need to know, and why shorting Ford is a better bet right now than going long. But, again, it all comes down to probabilities and understanding momentum. The Bull Trap and Technical Stair Steps As I noted, momentum turned negative on Tuesday after a steady outflow of capital dating back to April 1. However, if you look at this SPY chart (The ETF that tracks the S&P 500), you’ll see that the index uses its 20-day moving average as bottom-line support for an upward move dating from March 16 to March 30. [SPY]( Click to enlargen This rally was rather incredible. And it fueled a dramatic reversal that started on the first. Now, I’m not drawing channel lines that show upward and downward support. But you can see as the market climbed during those two weeks, we saw higher highs and higher lows. The market continued to find support during selloffs and would take another leg up upward. Once momentum turned negative earlier this week, we saw the opposite. Lower highs and lower lows. And those lower highs are what tend to define a “Bull Trap.” A stock or index can break above one of the defined support levels and signal that it’s time to buy. However, what can happen is that a short-term rally is a reason why many people come in off the sideline, only to be trapped. Their buys can fuel a loss pretty quickly as the market reverses and follows its ladder-down step pattern. Back on January 13, market momentum went negative. I circled it on the chart with the skills of a kindergartner... [SPDR]( Click to enlargen As you can see, there are multiple upward blips along the way down. See the red arrow, also drawn with toddler-like skill? Those are little bull traps along the way down. Momentum didn’t go positive again until around January 28, when the insider buying/selling ratio was at its most substantial level since March 2020, according to SECForm4.com. When momentum goes negative, it can and should take capital a lot of time to move off the sideline and back into stocks. We’ve seen over the last week that just a little bit of volume can drive stocks up in a short period. Unfortunately, this weak volume REALLY means that many retail and institutions are not interested in buying too many stocks. The value of measuring broad market momentum is that based on volume and price movement, it is an excellent time to move in off the sideline. Add that to a strong insider buying/selling ratio (a measurement of what company executives do with their own money). You can take confidence in buying back into the market. The weakness in this market is especially pronounced by selling pressure in the Mega Cap stocks today in Meta Platforms (FB), Amazon (AMZN), and even Alphabet (GOOGL). All are fine long-term investments, but if you’re looking for an entry point, remember that you’ll be able to buy for less if momentum remains negative. I’ll let you know when the momentum is bullish once again. But, for now, exercise patience and remember that cash is your best friend. A Quick Word on the Fed As I noted yesterday, we lack enough data on the Fed’s quantitative tapering program. As a result, we can only go on the Fed’s previous tapering efforts to estimate what the future might hold. The central bank announced that we’d see a VERY aggressive liquidity reduction by the Fed in the months ahead. It will be EVEN FASTER than what transpired in 2018. The Fed ramped up its monthly reductions to $50 billion over nine months. In this case, it will ramp them up to $60 billion in just three months. As a result, we’ll also see a reduction in mortgage-backed securities and far more rate hikes than expected. In 2018, the S&P 500 experienced a decline of about 6.5%. However, it’s important to remember that the final month of the year experienced a peak to trough decline of nearly 20%. I cannot tell you if or when that sort of decline will occur. However, before March 2020, that was the most significant downturn for the market over the previous decade. It appears to have been directly linked to Fed tightening AND a major geopolitical event around tariffs. Given that we have a major geopolitical event, generational inflation, a gauntlet of overpriced stocks, and a Cape Shiller S&P 500 ratio higher than most of the downside of the Dot-Com bubble, I urge extreme caution. If momentum goes negative (it’s negative now), I like to hold as much cash as possible. A 2018 downturn would come AFTER I receive a signal, and while we might experience a few percent loss, “moving to cash” and waiting it out is far better than trying to time the bottom. I hate to lose more than I like to win. That’s why I focus so much on playing defense in the markets. And it’s why I follow institutional momentum and insider buying like a hawk. Enjoy your day, [Garrett Sig] Garrett {NAME} Chief Analyst, American Markets --------------------------------------------------------------- [] Reclusive California Tech Wiz Reveals... the Perfect AAPL Trade [San Francisco bay]( [See the reveal of this remarkable system]( --------------------------------------------------------------- [] [] Reclusive California Tech Wiz Reveals... the Perfect AAPL Trade [San Francisco bay]( [See the reveal of this remarkable system]( --------------------------------------------------------------- [] [] [] A chance to make $490 on a stock every day the market is open? Every morning for the last few months, a notorious market veteran has been quietly sending out a list of his favorite high-potential stock picks to a small, select group of successful traders… And [open enrollment is still available to the public.]( A rare opportunity for everyday traders just like you! Trade “side-by-side” with a 20-year trading industry legend by trading the exact same stocks he is every single day the market is open. Every day, before the market even opens, you could be receiving this legendary trader’s personal “hot sheet” of top stock picks for the day. Stocks that have the highest probabilities of moving 5% to 10% in just a couple of hours each trading day. Giving you, starting as soon as tomorrow, a shot at making $490 (or more) every single day the market is open. A potential $98,000 a year in trading profits… All by simply following the same trading watch list of this seasoned trading pro. But you have to move fast… we don’t know how long this opportunity for the general public to join will last. [Click here now to get on the list.]( --------------------------------------------------------------- [] [] [] A chance to make $490 on a stock every day the market is open? Every morning for the last few months, a notorious market veteran has been quietly sending out a list of his favorite high-potential stock picks to a small, select group of successful traders… And [open enrollment is still available to the public.]( A rare opportunity for everyday traders just like you! Trade “side-by-side” with a 20-year trading industry legend by trading the exact same stocks he is every single day the market is open. Every day, before the market even opens, you could be receiving this legendary trader’s personal “hot sheet” of top stock picks for the day. Stocks that have the highest probabilities of moving 5% to 10% in just a couple of hours each trading day. Giving you, starting as soon as tomorrow, a shot at making $490 (or more) every single day the market is open. A potential $98,000 a year in trading profits… All by simply following the same trading watch list of this seasoned trading pro. But you have to move fast… we don’t know how long this opportunity for the general public to join will last. [Click here now to get on the list.]( --------------------------------------------------------------- [] [] Article Recap - [Beware The Bull Trap](#i572731) - [A chance to make $490 on a stock every day the market is open?](#156387) --------------------------------------------------------------- [] Article Recap - [Beware The Bull Trap](#i572731) - [A chance to make $490 on a stock every day the market is open?](#156387) --------------------------------------------------------------- [] © 2022 Godesburg Financial Publishing, Inc. DISCLAIMER: COMMUNICATIONS FROM GODESBURG FINANCIAL PUBLISHING (GFP) ARE FOR EDUCATIONAL AND INFORMATIONAL PURPOSES ONLY – NOT INVESTMENT ADVICE: GFP and all the services it offers are for educational and informational purposes only and should NOT be understood to be securities-related offers or solicitations. None of GFP’s communications should be considered or used as personalized investment advice. GFP recommends that you speak with a licensed professional before making any investment decision. RESULTS PRESENTED ARE NOT NECCESSARILY TYPICAL OR VERIFIED: GFP communications may include information regarding the historical trading performance of gurus in their services (all verified by a third party), as well as testimonials of non-employees depicting profitable investments and trades that are believed to be true based on the representations of the persons providing the testimonial of their own free will. Please be aware that the claims regarding investing or trading results of non-employees are not tracked by GFP nor can they be verified. As always, past performance is not necessarily indicative of future results. Therefore, results presented in this email should NOT be considered TYPICAL. Actual results can and will vary based on everything from experience, ability, risk mitigation practices, and market volatility... to the amount of money exposed in the investment or trade. Investing and trading are speculative and carry serious risk. You may lose some, all - or possibly more - than your original investment or trade. GODESBURG FINANCIAL PUBLISHING IS NOT AN INVESTMENT ADVISOR OR REGISTERED BROKER: GFP, including its owners and employees, are NOT registered as securities broker-dealers, brokers, or any sort of registered investment advisors with the U.S. Securities and Exchange Commission, any state securities regulatory authorities, or any self-regulatory organizations. GODESBURG FINANCIAL PUBLISHING EMPLOYEES MAY HOLD SECURITIES DISCUSSED: If a writer holds any securities in a communication, it will be disclosed along with the information on the potential investment or trade. HIR, its owners or employees, have not been - or ever will be - paid by the issuer of a security mentioned in our services or communications. GFP, its owners and employees are paid entirely or in part from commissions based on sales of their services to subscribers. For more information, please visit [our disclaimer page here.]( Sent to: {EMAIL} [Unsubscribe]( Godesburg Financial Publishing Inc., 251 Little Falls Drive, Wilmington, DE 19808, United States [] © 2022 Godesburg Financial Publishing, Inc. DISCLAIMER: COMMUNICATIONS FROM GODESBURG FINANCIAL PUBLISHING (GFP) ARE FOR EDUCATIONAL AND INFORMATIONAL PURPOSES ONLY – NOT INVESTMENT ADVICE: GFP and all the services it offers are for educational and informational purposes only and should NOT be understood to be securities-related offers or solicitations. None of GFP’s communications should be considered or used as personalized investment advice. GFP recommends that you speak with a licensed professional before making any investment decision. RESULTS PRESENTED ARE NOT NECCESSARILY TYPICAL OR VERIFIED: GFP communications may include information regarding the historical trading performance of gurus in their services (all verified by a third party), as well as testimonials of non-employees depicting profitable investments and trades that are believed to be true based on the representations of the persons providing the testimonial of their own free will. Please be aware that the claims regarding investing or trading results of non-employees are not tracked by GFP nor can they be verified. As always, past performance is not necessarily indicative of future results. Therefore, results presented in this email should NOT be considered TYPICAL. Actual results can and will vary based on everything from experience, ability, risk mitigation practices, and market volatility... to the amount of money exposed in the investment or trade. Investing and trading are speculative and carry serious risk. You may lose some, all - or possibly more - than your original investment or trade. GODESBURG FINANCIAL PUBLISHING IS NOT AN INVESTMENT ADVISOR OR REGISTERED BROKER: GFP, including its owners and employees, are NOT registered as securities broker-dealers, brokers, or any sort of registered investment advisors with the U.S. Securities and Exchange Commission, any state securities regulatory authorities, or any self-regulatory organizations. GODESBURG FINANCIAL PUBLISHING EMPLOYEES MAY HOLD SECURITIES DISCUSSED: If a writer holds any securities in a communication, it will be disclosed along with the information on the potential investment or trade. HIR, its owners or employees, have not been - or ever will be - paid by the issuer of a security mentioned in our services or communications. GFP, its owners and employees are paid entirely or in part from commissions based on sales of their services to subscribers. For more information, please visit [our disclaimer page here.]( Sent to: {EMAIL} [Unsubscribe]( Godesburg Financial Publishing Inc., 251 Little Falls Drive, Wilmington, DE 19808, United States