Calling the Bottom

20th Mar '20 by Terry Dickens

44 comments 2896 reads

I am going to call the bottom of the market (FTSE100). How do I do this ....... well it's all about the magic of Technical Analyst, and I am going to tell you when to reinvest again (buy Long)

You do not believe me, well here it comes. (for free)

THE BOTTOM

Well, guys, you miss it....... and it was not one but a double bottom. The first bottom was on the 15th of March and the second bottom was on the 19th of March.

REINVESTING

The time to buy back into the market is on the 23 March. You should make tentative purchases on this date, one or two small trades if the FTSE 100 pulls back to 5100. Then again on the 25th of March again tentative if the FTSE 100 pulls back to 5300. Each time with one or two small trades only. Then the all-out attack on the 29th of March if the FTSE 100 pulls back to 5,500. From then on the sky's the limit.

If I get this right or nearly right then I should write a book on investing, LOL. Let us review the situation in April.

This is all a bit of fun........... BUT what if I an correct?

Good trading guys and may all your trades make you money.

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William K

25th Mar '20

Below is an extract from yesterday's daily ChartAdvisor newsletter (24th March 2020) from Investopedia. It suggests that the VIX (uncertainty index based on futures market) could indicate the bottom of the market when it settles below 40. The DJIA ended the day up 11% but the VIX also finished slightly higher at 44 - contradictory signals indicating strongly divided opinions among US investors.

Eight days ago the VIX options were pricing in a 50% probability that the VIX would remain above 40 for 40 days from that time (about April 24). Today the pricing has eased up a bit and there is now a 50% chance that the VIX will drop below 40 by April 23. In the worst of the 2008 financial crisis, the VIX stayed above 40 for nearly 100 days, but once it closed below that level, the markets hit bottom and rebounded strongly.

The link below puts you on the free Investopedia mailing list. But if, like me, you don't click on to unknown links, you can subscribe to the newsletter directly from Investopedia.com .

https://link.investopedia.com/...

dfs12

Wow Terry you've played a blinder so far.

LongValue

Tend to agree with what someone recently said and so I leave bottom picking to the proctologists.

jwebster

Well shares are on a rip now based on Congress agreeing massive stimulus. Much more than the $800 billion back in 2008. Certainly a future headache and a read across for Gold, but that's another story.

In 2008 after the stimulus package was released shares still dropped until SPX touched the fated "666" level then fired off into an 11 year bull run.

This time, the storyline is either:

(a) this is a short rebound, which will be sold off as virus cases get going in the USA, similar to the Italy experience. So sit tight and wait, we haven't seen market capitulation yet. The dip buyers need to take some pain and sell off.

(b) the market will look through the next six months, has already priced in the Italy experience as it's already known data, see the massive stimulus coming down the line, and buy into that tidal wave of cash

If you go by the 2008 experience, you would pick (a) I think. If you go by the speed of this decline and reaction, you might go for (b) as the 'obvious' has been priced in already. The surprise would be a quick rebound as it's not consensus.

TBH either is quite plausible.

So my view is not to pick an index level so much, exception being I will buy the NASDAQ as a long term Tech hold, but otherwise make buying decisions at an individual stock level. Reason is, while the indices are whip sawing, some individual stock charts are making more stable looking bottoming patterns. So I'm picking up a few now, albeit with the caveat mostly large caps with liquidity, as if I'm wrong, can still get out.

If you buy now have to have a plan what you will do if they promptly drop 10% the following day(s)

Either way, I have to admit, even if I miss the bottom buying today is a lot cheaper than buying a month ago.

Terry Dickens

It's the 25th of March around 9 am

Well, I wasn't far off (so far), but it was a triple bottom, not a double bottom, on or near 4840. The market is up again today, so I am now waiting for a downturn to around 5250, thereafter an upturn to around 5874.

Let us see

Keep safe everyone

31st Mar '20

Just an update on my prediction from the 20th March.

Still looking good.

I told everyone to return to the market when the FTSE 100 reach 5500. 11:00 hours today (31/3) the FTSE at 5650.

When we hit the first of the three bottoms the 200DMA was 2100 points higher, now (31/3) we are only 510 points away.

On 20th March I had no open position. I am now Long on SLP; DTG; SPT; WIN and NCVT and Short on VOD and HMSO.

Rusty2

I take you mean £NCYT?

Yes, sorry for the typo

bryans1311

7th Apr '20

Terry, this is either the case of a stopped clock being correct twice a day, or you have Mr Market on speed dial! Your predictions have been spookily accurate so far!

Thank you Mr. Bryans - I will update it in a week or so when we get a better picture

Rom999

Impressive Terry - well done to you.

stevelikesdylan

I think that you are calling the bottom of the first wave of the virus. The fear is that a possible second wave from November will be far worse in terms of deaths and the economy. No it won’t be as bad as the Spanish flu but there is evidence that it could mutate and that not everyone will have built up immunity.

Silver Moon

11th Apr '20

Terry it's the 11th of April, Easter Weekend, and I'm taking a look in the rear-view mirror. You were spot-on with your 23rd of March lowest point in the FTSE All Share Index. The 29th of March date, a Sunday, had me fooled for a minute though! Congratulations, also for the confidence-inspiring 'sky's the limit' prediction. The 3rd of April may prove to be another significant date.

23rd Apr '20

Hi guys

I promised a review of my Bottom Call on 20th March, so here goes

For those that are interested, I was using the FTSE 100 4 hour chart. If you bring this chart up you can clearly see the triple bottom on the (16/4:19/4 and the 23/4). We now are approximately 970 points above the bottom and the price broke above the 200DMA on the 14th of April.

Thereafter I suggested a few tentative buys @ 5350 and 5950.

We are now about four weeks into a flat trading range between 5350 to 5950. The current price is about 5750, so no more buying until we see which way the market will go. If it brakes out above 5950 ... no, 6000, then start buying, If it drops below 5300 then start selling short.

MY current positions are as follows

LONGS: #LIO #DTG #PLUS #SLP #POLY #SPT #WIN and #AVCT

SHORTS: #MARS and #VOD

OK enough for now. Please keep safe and may all your trades be winners

Aboyle

24th Apr '20

you nailed it well done. What do you think now ? Low volume rally as the FED put kicks in again. No one believes in it or a V shape recovery.

Ignore this was written before yesterday’s comments but didn’t go apologies

25th Apr '20

Great prediction and sound advice. The VIX fell below 40 for the first time in a month which suggests also that the worst may be behind us, although it's too early to get complacent. The low oil prices are still a concern. But I'm cautiously topping up Rio Tinto (LON:RIO) and Scottish Mortgage Investment Trust (LON:SMT) at present. I will check out your long positions, although I'm wary of topping up on Liontrust Asset Management (LON:LIO) - they still look fragile.

Metatron

Note historically the day in a month the stockmarket is most likely to go up is on a New Moon (just passed) and the day the stockmarket most likely to fall is on a Full Moon (in 2 weeks)

26th Apr '20

Mr. Wilkonz

Feel free to check and comment, I will lock forward to it,

@ Terry

I think Spirent Communications (LON:SPT) is promising, I'm considering buying it myself. Plus500 (LON:PLUS) look pretty good and I note the directors have been buying it since the fiasco of the 'typo' last year when it fell to 500. Polymetal International (LON:POLY) is just about OK but a fraction too much debt for me. Sylvania Platinum (LON:SLP) I hold and think it will top 60 pence before the year is out. Avacta (LON:AVCT) is a loss-maker on a parabola so I wouldn't touch it. And Wincanton (LON:WIN) is just plain dull - I held a few years ago and it never did anything to get excited about.

Calling the Bottom

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Terry Dickens

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