How are losses on the stock market recovered?

The risks of investing in equities were evident from January of this year onwards. The world stock exchanges have lost about 25%, and many investors, as usual, and against any logic dictated by the study of historical series, have sold shares at a loss. The best investment strategy, on the other hand, would be that of the dollar cost average, that is to buy a small part of your portfolio in shares in installments during the downturn, and the remainder on the world stock exchanges diversified based on GDP, with a perspective of at least 7/10 years. It must be said that an average decline of 20% in the historical series was absorbed in 3/5 years, in some specific cases even less, in others more time. How are losses on the stock market recovered? Lowering the cargo price, and waiting.

Furthermore, in the first 26 months of the decade a significant minimum tends to form which should no longer be touched up.

Let’s proceed step by step.

We have two dates before us, by which, according to a statistical principle, the markets could definitively return to the upside: October 17, 2022, and then the first ten days of March next year.

At 5:44 pm of the stock exchange session on October 4th we read the following prices:

Dax Future

12,673

Eurostoxx Future

3,477

Ftse Mib Future

21,535

S&P 500 Index

3,781.44.

Is it back to the upside as per the forecast fractal? New alignment?

Forecast in red, while in blue the trend of the price lists. The graph is on a weekly scale.

Until August 16, setup deadline, the “correspondence between the two lines was almost 100%.

Possible modification of the weekly scenario

The maximum is expected between Monday and Tuesday, and then a subsequent decline.

The levels to be monitored to define the next price direction

Dax Future

Very short bullish trend until we see a daily close below 12.277. Only lasting upside with next week’s close above 12,435.

Eurostoxx Future

Very short bullish trend until we see a daily close below 3.355. Lasting upside only with next week’s close above 3,392.

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Ftse Mib Future

Very short bullish trend until we see a daily close below 21.070. Only lasting upside with next week’s close above 21,390.

S&P 500 Index

Very short bullish trend until we see a daily close below 3.604. Lasting highs only with this weekly close above 3,737.

The forecasts of our Trading systems

Contrasted direction and therefore Flat.

What to wait for tomorrow after the opening of the stock exchanges?

The rebound, after a few hours of uncertainty, could continue.

So how are the losses on the stock market recovered?

Not giving importance to what happens in the short term, but analyzing one’s risk profile thoroughly, and investing with a diversified asset allocation on the world stock exchanges.

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