• 288 days Will The ECB Continue To Hike Rates?
  • 288 days Forbes: Aramco Remains Largest Company In The Middle East
  • 290 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 690 days Could Crypto Overtake Traditional Investment?
  • 695 days Americans Still Quitting Jobs At Record Pace
  • 697 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 700 days Is The Dollar Too Strong?
  • 700 days Big Tech Disappoints Investors on Earnings Calls
  • 701 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 703 days China Is Quietly Trying To Distance Itself From Russia
  • 703 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 707 days Crypto Investors Won Big In 2021
  • 707 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 708 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 710 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 711 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 714 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 715 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 715 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 717 days Are NFTs About To Take Over Gaming?
  1. Home
  2. Markets
  3. Other

When Does a Shorting Opportunity Come?

Many investors are chomping at the the bit for shorting the stock market. If you think about it, it reflects a personal belief of what they expect will happen.

The big question is "How can we know there will be a severe drop, and how early can we know?"

In order to answer this question, we went back on the Super Accelerator Model and looked for the indicator events that gave us an early warning in 2008. Here is the chart and what we found ...

Note that the really big down moves only happen when the Super Accelerator moves into Contraction Territory along with the S.T. Accelerator and C-RSI being negative as well. But if we ignore the Super Accelerator and if we look for the S.T. Accelerator being at an extreme low along with the C-RSI going negative at the same time, then we can get an early warning 1 week before the down event. (A deviation from that was when the Super Accelerator was still in Quadrant 2 (a lower positive level). In that case, waiting 2 days and watching the S.T. Accelerator showed an upside turnaround like what happened in August 15 of 2007. Below is the 2007 chart that show's the timing.

Contrast this with where we are now. The Super Accelerator is in Quadrant 1, the S.T. Accelerator is dropping, but it is still in Mid-Quadrant 2 (a lower positive), and the C-RSI is still positive. The S.T. Accelerator and the C-RSI are both dropping, but they have not gone negative yet for an early warning shorting condition. So, while conditions are concerning, they haven't deteriorated to a Super Accelerator Danger level yet.

The S.T. Accelerator and the C-RSI are both dropping

 

Back to homepage

Leave a comment

Leave a comment