Of Mr Market's excellent memory and The Tortoise & Hare story - Thomas Ng 26 Jan 2022
On Wed 26 Jan 2022 11.06pm, I emailed Clients my latest post titled 'Of Mr Market's excellent memory and The Tortoise & Hare story'.
PATREON subscribers receive it on 26 Jan too. To subscribe to PATREON, pls click here.
'Dear Clients
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I've attached 2 interesting images for a quick mid-week update:
S&P500 Index Daily, 10-mth
1) Reference to the attached S&P500 Index (SPX) Chart (see Point A), you will notice that Monday's (24 Jan) price action simply touch my downside support/target at 4240+/- before staging a massive reversal to close the day positive.
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If you are a close follower of mine, you may have noted that the Blue zone on the Chart was already shown in my 18 Oct 2021 writeup! Ref: https://www.thom-ng.com/post/did-the-bulls-wrestle-the-ball-back-to-their-court . And in case you didn't notice, this support line 4240 is also the very same resistance line that SPX broke out from back in late Jun 2021. See Point B. . This is the concept of Resistance becoming Support in Technical Analysis. . In effect, it also tells you Mr Market apparently has 'memory', and is pretty good actually!
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2) Ref to the 2nd image from a Financial Times article titled 'Warren Buffett closes in on Cathie Wood as tech stocks tumble':
'The Tortoise & Hare Story' in real life! Source: FT
With due respect to both famed investors, it seems like the story of 'The Tortoise & The Hare' is a pretty good analogy to their very different investment styles, namely Value & Growth.
Full FT article here, for your reading pleasure - https://www.ft.com/content/42bb6639-79a0-48da-9f21-01f33e7370f9 .
But more importantly, me being a Contrarian would like to think that such featured stories in FT or BusinessWeek may just potentially mark a turning point soon for Ark actually. To be clear, I'm not saying Ark is gonna hit new highs in 2022, but a rebound may be due, what do you think?
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Btw, check out this 2007 research paper titled 'Are Cover Stories Effective Contrarian Indicators?':
https://www.researchgate.net/publication/228258341_Are_Cover_Stories_Effective_Contrarian_Indicators
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Interestingly, the last line of the paper's Conclusion says: '..Consequently, we conclude that if an investor is short the stock of a company that is the subject of a negative cover story, the publication of the story indicates it is time to cover the short position because the stock has hit bottom..'
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Oh well, food for thoughts on a Wednesday night!
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Live Long & Trade Well.
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Thank you & regards . Thomas Ng, CMT Principal Trading Representative 首席股票经纪 www.thom-ng.com . #plsreaddisclaimer #chartforillustrationonly #spx25Jan22 #valuevsgrowth #buffetvswoods #befluid #wytant #livelongandtradewell Chart source: tradingview Image source: https://www.ft.com/content/42bb6639-79a0-48da-9f21-01f33e7370f9'