Nimble Trading and Conservative Profit Targets

Bear Market rallies provide ample opportunity for active trading. Gary Glover from Novus Capital reviews the buying indicators and how to adjust profit targets in a bear rally.

[00:00:07] We are looking at the market rallying back up from its lows and then pulling back from some resistance levels that are sitting just above Gary Glover's main audience through port loading where the points are and more importantly, the shares were trading in this market cycle. Good morning, Gary. How are you? [00:00:21][14.2]

[00:00:22] I'm pretty good, Chris. What's happening? [00:00:23][1.6]

[00:00:24] Well, looking at these numbers, I think you've hit the nail on the head with the S&P. You did really well. It hollering at sixty one point eight retracement was where you saw some overhead resistance. What happened when the market got that? [00:00:37][12.8]

[00:00:39] Yeah. So we have had a bit of a retraction there, so. But yeah, I'm still got. [00:00:44][5.4]

[00:00:46] I think we'll get a little pull back. I'm still much super bearish here. I'm just sort of still feel like the shorts are too heavy and so they've been squeezed here a little bit, obviously. That move up sort of the last week and a half a squeeze. Come with us. Some of the bears out. And we definitely saw quite a Bieler, quite a bit of bullish rhetoric in the last weeks. A lot of people starting to turn more positive. So definitely started to see the the tide turn, which is always something that you might be getting a bit of a peek here. So so we have had a bit of a pullback from the S&P. So I don't expect a big deep leg down. We could look March and my other two to lows, two months most likely to find lows in the zero year. So they're sort of pivot points. I really do like the march low so we can get sort of something maybe like a a high low in May. But I guess, you know, type bearish on the US, but not to get too bearish. Actually, I think you're not going to see a big move here. In my opinion, it needs to use a bit more time here first. [00:01:47][61.7]

[00:01:49] It could be a buying opportunity. It depends on the specific positions you working. You don't imagine. [00:01:54][4.5]

[00:01:55] You look at the U.S. comes back. Look at my comeback. Thirty eight point two, having Martha three to one point eight. That's a bit of a level to keep an eye on there. So. Now our markets kind of didn't think like it to the 50 percent level, which is kind of a level that we normally get to. We got past the thirty eight point two. But. So just going out on their market, was it a sign this week we sort of had a little bit brighter on the wedge, three days down, an enemy rally twice as many days. So six days up and then we didn't get all new highs. That was a little bit of a. Why would you say that? So you usually sort of Trina, Tom, Azazeal, equal or time might be double. And if they say twice as much time and we don't get to a new high, then that's that's always a bit of a bit of a sign. So I've had a bit of a pullback. But again, I just can't get too negative here, really. So I think we're rebuild here that the volumes so far have been pretty robust. So, yeah, I just I'm just trying to say the clients obviously looked a little bleak there after the six one point up on the US market had a pretty decent life down. And then on Friday. We had a pretty decent move down as well on the index that looked a little scary. [00:03:04][69.2]

[00:03:05] But I think just short time, I think maybe we come back to fifty one hundred. [00:03:10][5.2]

[00:03:10] But again, I just know it's going to be messy from here since Monte Shelvey bear market is certainly looking at your weekly report. There's some good questions in he that I wouldn't want ask you about. The Dow Jones, so to speak, to the chart of the screen. He in a nice summary of questions. So point blank, are we in a bear market phase now? [00:03:33][23.1]

[00:03:35] Yes. Yes. So, yes, it's very likely. So where is the market likely to go lower? Yes, it is again. But the big but he is that it's not likely to do it, so. I think so. And I think more than likely it's actually not likely to sign. So. And why is that? It just does not have there markets operate. So if we go back and briefly go back and study bear phases and stuff like that, they take a long time to turn that themselves out. And typically, you know, if you think about the decade cycle, we sort of feel know we. [00:04:09][34.7]

[00:04:13] Most most bear Pfizer sort of started, you know, usually the end of the 90 year old started the zero. Yes. Just kind of the typical sort of decade pattern of it was some exceptions into that, but that some if we follow that pattern, it's quite typical. But 0 1 2 years, typically you're bearish years and this is up and down and there's heaps of volatility in that move. And what normally does happen is the first leg down actually does mark a reasonably large percentage of the of the whole move down. And then you get a bit of a bounce and then then your temper. You can shop around for a long, long time here. So I think as we sort of highlighted, you know, even the worst market in history, which was the twenty nine. So to get that market bounced. Thought for five months before we had a lower, high move down here. So I just I just take a lot of time here. So I mean it's gonna go lower. This takes a little time before that. Yeah, that's right. Isn't the time. So just you know you gotta remember here with was we've done pretty well here in Australia, obviously going to be pretty low on the on the on the cold side. Their restrictions are getting relaxed here. The government is around so much money in the system as well. So with there's a lot of money in the system here. You know, going to September with a job seeker. So stuff. So but let's cut. We're probably not going to know until post September, sort of October. You know, how it runs faring as well. So it's just gonna take a long time here. So, yes. So I'm not as not as bleak as some. May I just. I'm just saying you got to be a bit more neutral here. So. So can't get too bearish. I just see the emotions changing here. Sort of. We we're down 30, 40 percent above getting there. And then we bounce again, hold some restrictions coming off highs. But we were back then. Then we turn back down again. Putting our ship was going to get back Marchesa level again. It's just I think just going to sort of, you know, put the emotions to the side and just understand that how bear markets work, where they're messy, the time consuming, they go up and down. So I just think, you know, see all the best to do, if you like, get a lot nothing to these rallies. You get us when they sell offs together. It. Deputising again when they rally again to a lot. Not so whether you use the options of Cowper-Coles or whether you just tried the ranges, just try and let some off. That's that's that's the way I'd look at these markets here. So. But I think, you know, I really think this is going to you know, typically these markets here, though, it's this can be choppy here until October 2022. We're probably not going to come out of the bushfires until probably the start of 2023. But the good news is probably two thirds of the damage is probably done on the first like down here. [00:06:59][165.7]

[00:06:59] But in between where we're going to be up and down, up and down, we're gonna go lower. But I think we'll probably go lower till next year and then maybe we retest again the following year and then we go to highlight the year after that. But the good news is we're going to have some pretty decent size swings up and down. [00:07:16][17.0]

[00:07:17] So that's what history has shown us, is any little damage has been done being neutral, but also be KDAF, be nimble in these market because there's a lot of up and down swings, a lot of money to be made here. I guess it leads to your trading she's putting in each week and this week looking at the market and seeing 10 20 change 2012 to be a couple of years here. [00:07:47][30.3]

[00:07:49] We saw that. That's a good chop. The I mean, even if it's not a long one here, that 2010, 2012, that wasn't particularly long bear market there. But we still you know, the first like down was pretty heavy, 1 1/2 months. Then it rally pretend the half months. You can see how choppy and overlapping that 10 months was. Those, you know, was it wasn't a strong trade. That was just an overlapping trend. And then we had a move down there. Then we had a big bounce, then a retest and then a bounce again and and retest and then a staggered bounce and then another retest. [00:08:21][32.0]

[00:08:21] That's I do really think this to be taken or maybe a lot of indices just got sick of the sharemarket because it was just the cutest thing on the emotions. [00:08:30][8.8]

[00:08:31] That's right. So the thing is, probably the thing we've got to maybe adjust here is rather than sort of riding out winners too long here, we've probably got to we're going to be a little bit more active, have a bit more nimble, as you mentioned earlier there. So don't be sort of holding up to these big 30, 40 percent lows. Maybe if we get a 15, 20 percent move in our stocks, that's that's probably enough. So, um, so, yeah, it's going to be a bit more people nimble, lots of MOF, you know, picking back up again on the on the knees and locking 'em off again. So yeah, it's yeah. I think that's just the way we do it. That's a slight forward. [00:09:09][37.4]

[00:09:10] Well if we look for that in the way forward, we've got oil search in front of this moment, its sights on its knees and pushing through. A lot of volume is trading this week, Gary. [00:09:20][10.1]

[00:09:21] Yeah, probably looking for the top 300 there. Probably sent them maybe 30, 40 stocks that I thought had a pretty interesting sort of pattern in terms of that. Obviously, that's come off pretty hard here. I'm just saying there's some big volume accumulation of caring at the lungs. So normally, like when I see. I mean, you know me so of see the big volume. You know, it's a it's usually a. At the hawser lies. It's all there, it's a question of whether it's accumulation or distribution. So if we've had a really, really deep low in an awesome volume also starts to come in there, that's something that's a sign of accumulation. [00:09:59][38.1]

[00:10:00] If if we've sort of run, run, run, run also on the volume picks up, then that's usually a sign of desperation as well. So just when you say big volume, you just gotta ask yourself that question, is it cumulation or is it distribution? And just so quite a few stocks there where the volume was was was medium on the way down, but then it was heavy at the low end. If it was heavy on the way down and then medium on the on the bounce, then they're the ones you don't want to go in here. But if we see this sort of volume pick up, particularly around the lower levels, then that's the stuff at term that jumped out at me. So I definitely saw, you know, a good 30, 40 stocks in the 300 there that were that had that type of pattern. So that's kind of encouraging to me that there's some stocks here that'll have a bounce and follow through. So just from my experience, say when you don't see volume, big, heavy volume, that's when you don't get necessarily but the follow through and the bounce, you might get a you get a bounce, but not a big one. To the small bounce, but to see a bit of volume, that's when you can get a sort of slightly larger bounce. So it's I'm I'm looking for hyper. The stocks are going to bounce a bit larger than some of the others. So that's the theory. [00:11:12][71.6]

[00:11:13] Oil search might be one of those indicator that looking like it could be another one. [00:11:17][3.8]

[00:11:17] Yes. So we've had the bottle. Yeah, exactly. Come back and retested an old lot of the false break as well. The volume is as up here on these lows as well. So big, big volumes sort of carrying this looks looks like accumulation. So they can hold that sort of last low there. Now it's done a bit of a rising here, so. Yeah. So. Yeah, probably got some of the uncertainty. Know grant financing Fonzi. Yeah, sure. Yeah, but it's, um. But yes, we're just looking for some new signs. So it was this few Stokes's. That's the sort of stuff I'll be I'll be looking for. We're looking for the increase in volume, not increase in volume on the way down as penny stocks that were basically that were sold off pretty high was pretty big. They're the ones I probably don't want to go for, for a more normalized volume on the way down. And then a really a big pick. I mean, that also say that the volumes are like triple probably the last time of the last six weeks in average volume. So that's telling us big chemo, you know, teammates. It's my opinion. It's telling me it was big in relation to taking place. So, yeah. [00:12:26][68.2]

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