Social media is a gold mine of ideas if you know whom to follow. One can get extremely profitable trading ideas by following the right people. There are some highly respected stellar analysts/traders/portfolio managers that share some of their best ideas in order to drum up new subscribers to their platforms or advisory services. A few will even give trials of their services.
Social media is not only good to pick up investment ideas, it’s a great way to gage sentiment for the markets, and individual companies. In addition, search engines such as Google also have rankings that deliver information on search trends that can be helpful in catching emerging trends ahead of the crowd.
Case in point, Google Trends was a good source of social sentiment at the start of the pandemic as the virus was first emerging in the United States. One had to extrapolate that information into an investment thesis, but the hard part was already done by the statistics provided by Google Trends. Following the term “pandemic” from mid-February 2020 one would have noted a complete collapse in searches for that term starting in mid-March of that year just prior to the market bottoming. It was a helpful fear gage, and gave a good indication that the public mood had adjusted to the news of infections, hospitalizations, lockdowns and business closings. It showed that news flow was affecting the public psyche less and less. A sign of a potential turn for the market.
On the current market, it is our opinion that the bounce we have seen in this bear market has run its course, and that selling is re-emerging. The Fed minutes came in much as expected with a runoff of the balance sheet to approach $95 billion per month and the prospect of future fed funds hikes to be a stronger 50 basis points per meeting. It was not an aggressive statement based on expectations.
Looking to our master cycle which we use as a forecast for what to expect in the near future, we had called for high on April 6 plus or minus one trading day. It appears as of this writing that the high came in on the 5th of April. From there we believe a low will be had before tax day Monday the 18th of April. That has been the tendency in recent years as explained in last week’s note. Looking at the calendar and a few other cycles we are of the opinion that a tradeable low will come on or about Wednesday the 13th, again plus or minus one trading day. From there a rally should ensue to culminate on Friday the 22nd (+/-1 trading day) then a fairly substantial sell off into the end of the month or first couple trading days of May. This is a roadmap / forecast and dates to be aware of to look for changes in short term trend. Nothing is perfect in the forecasting business. If we could approach a 70% accuracy we would be delighted.
Big picture the master cycle points to a decline into the end of June. Cycles can and do invert, where anticipated highs come in as lows and vice versa.
Trade well and stay safe.
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