Double sell on the Nasdaq
In the dynamic world of trading and investing, the Covid-19 pandemic has served as a transformative catalyst. Market behaviors, trader attitudes, and even commonly used indicators underwent seismic shifts during this period.
In an overbought scenario, for instance, the ratio would be skewed towards calls and would have a low value, often leading to market corrections and providing savvy traders with cues for profitable entry and exit points.With the advent of the Covid-19 pandemic, the stock market experienced an influx of new participants. As lockdowns were implemented globally, traditional avenues for entertainment and engagement were suddenly curtailed.
After Covid, the QQQ has exhibited an interesting trend where the put-call ratio and a cycle market top signal have aligned for the first time together. Given that the average market correction post-Covid has been approximately 18.5% to the downside, this unprecedented alignment of signals suggests that a similar pullback could be imminent.The NASDAQ was characterized by standard cyclical behavior.
Rising markets are fairly simple and much slower than falling prices which are violent and require active intraday position management. Also, different sets of data and indicators are needed to trade rising and falling markets, which is where most individuals get things wrong. They use the same strategy in totally different market environments, and that’s a recipe for underperformance and substantial losses.Trading and investing are lifelong learning journeys.
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