It’s long-term buying season

Adding to this June 14, 2022 post,

the chart below also shows circles when the S&P 500 last traded low enough to render it Oversold when measured in a Relative Strength Index.

We are a moment of its 9th distinctive occurrence since 1987.

I say ‘distinctive’ because the S&P 500 is about to experience a ‘double dip’ weekly oversold moment within a 6 week period.

As I intimated in a recent post,

we may not need to see a week or two of massive capitulation volume, where instead that volume of aggressive sellers has been spread over some weeks.

And on the mean reversion topic, the S&P 500 is only 170 points away from ‘kissing’ its 200 week moving average.

While I remind myself that ‘timing is everything’, what is evident is we (unless you think there are structural systemic problems) are in a season of being a buyer and not a seller.

Another way to navigate the current pessimism and ‘noise’ is to look past the next few months and understand what you are invested in, the case for its valuation and why you own it.

If cryptocurrencies implode, it only matters if you own cryptocurrencies.

Filter the noise and those who generate it.

June 21, 2022

by Rob Zdravevski

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