Where To Invest During The Stock Market Collapse!?
Sep 04 2011
Three wave pattern as we know is a corrective structure, and since market already made one impulse down from 2007 pick, we know that long-term trend has changed from bullish to bearish. With this being said, investors and traders, who are aware of an extremely bearish technical picture, should move their money out of risky assets into cash.
During the crisis money is also going into the bonds, but this safe-haven may not last long, and here is the reason WHY, taken from the book Conquer the Crash (Chapter 15), written by Robert R. Prechter Jr.
However, you can also take advantage during the “stock collapse”! There are many ETF’s that are negatively correlated with stocks, which means they trade higher when stocks are falling. One of them is called SDS (UltraShort S&P500 Proshares). Well, lets take a look the wave count on it.
On SDS daily chart, we can see a very sharp rise from July lows, called an impulsive wave in Elliott Wave theory, followed by a three wave of decline from August pick. A corrective retracement that shows first evidences of a completion around 22 region. Further rise and close above 27 will confirm a bullish trend towards and above 30, while the S&P500 (cash market) will be moving lower.
Will you stay in cash, or will you move your money into assets like SDS is your decision, but keep in mind that there could be a good buying opportunity ahead of us, once the global bear market finds the bottom somewhere below March 2008 low.
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