Stock Market in 2023 -- Closing Summary Update

[Music]  thank you  the summary of my opinion is that  probably be sideways for the remainder  of 2023  I have the monthly chart on the left and  the yearly chart on the right I want to  summarize what I have been talking about  obviously all Trends eventually evolve  into a training range  on the monthly chart we've had several  small legs down but the follow through  on the way down has been bad  this is a trend we have a series of  lower highs and lower lows but it's not  nearly as strong as the bull Trend was  here on the way up  this is probably a bare leg and what  will become a trading range and when I  say a trading range I mean at least a  couple legs down and having at least 10  bars in it this is probably a first leg  down and at some point we break above  the Bull's Channel which we might be  doing now and then we get a second leg  down we could have many legs sideways to  down and the legs could go all the way  down here and it could become a very  large trading range but more likely it's  going to be a trading range something  like this and at some point the trading  range will break to the upside on the  early chart we had a trading range a  couple legs down about 10 bars or more  and then eventually you get a breakout  and in a bold trend  no matter how long a trading range lasts  the odds still favor and upside breakout  the more bars that are in the trading  range the more the probability of The  Upside breakout gets closer and closer  to 50 50. but if the trading range is  only 10 bars 20 bars the odds still  favor an upside Breakout  this sell-off is deep enough to make  Bulls wonder if it's a trading range  instead of a bull flag  a bull flag is a reversal sometimes it's  just one bar like this sometimes it's  many bars and then the bull Trend soon  resumes a trading range you have a leg  down you have a leg up and then you have  another leg down at a minimum and this  is deep enough and it's lasted long  enough so that many bulls are wondering  if this is the start of a trading range  and that whatever rally we get will fail  and then we get a second leg or more  sideways to down  now think about this on the way up Bulls  are buying buying buying buying buying  and why did they do that because they  think they're going to make money they  think that one of two things will happen  either if they buy here it just keeps  going up and they can make money or  it'll go down and it'll be a brief move  down and it will get back to the price  where they bought and they can either  get out Break Even or hold and it'll go  up and they'll make money  this is deep enough to make these Bulls  wonder if instead of the Bold friend  resuming immediately we're going to go  sideways for a long time if we're going  to be sideways for another 20 bars or so  many of these bulls will look elsewhere  for Investments for their money and  these rules therefore will look to exit  this position if the market gets back up  here we don't know how many disappointed  Bulls there are but there certainly are  a lot  when you have a deep pullback that lasts  a lot of bars a lot of the bulls will  exit around where they originally bought  so the Bulls who bought up in here a lot  of them are looking to exit sell onto  their position here and if enough do  you'll get a second leg side rooster  down  so I think this sell-off is big enough  and it has lasted long enough so that  there will be a substantial number of  bulls looking to exit around here and  then they'll wait to see how far down it  goes and look to buy again or they'll  look elsewhere for their Investments  I want to say one other thing about  these disappointed Bulls who bought up  here  if the sell-off is very deep I don't  know if this is deep enough but if the  sell-off is very deep a lot of the bulls  will be so disappointed that  they think it'll take a long time before  the market gets back up here and they  don't want to wait several years instead  what a lot of them will do is buy more  once they see a good looking reversal up  this is a good looking reversal lump and  then they'll look to exit at the  midpoint of their two Buys so if a bull  bar here and a bull bar here or if a  bull bar below that low anyway you got a  bull buying here and then other Bulls  flying more here their average price is  here which is around a 50 retracement  if a lot of the Bulls exit around 50  percent you get a lower high around 50  percent and then another leg down and  that's part of the reason why 50  retracements are so common you have  scale in Bulls Bulls who bought bulls  have bought more looking to exit at  their average entry price which is right  around 50 percent and the Bulls sell the  Bears sell all the time  with the bulls selling out of lungs and  the Bears selling into shorts the market  stops going up and it starts to go down  for a second leg  one of the Hallmarks of a trading range  is disappointment  the Bulls obviously are disappointed  that the market has stopped doing this  and it's now doing this  and the Bears will be disappointed if  this leg continues up strongly and goes  up very far  one of the ways that trading ranges  disappoint Traders is they tend to break  out to the upside and then reverse down  they tend to break out of the downside  and reverse up we have an attempt at a  wedge bottom one two three and if we go  up and then down here we'll break below  the wedge in general whenever the market  breaks below a reasonably good bottom  there's a 50 50 chance it'll go down for  some kind of a measured move and there's  a 50 50 chance the bear breakout will  fail and the bull Trend will resume  likewise if you break out of the top  there's a 50 50 chance the bull Trend  will resume and you'll get some kind of  a measure move up maybe based upon the  height of this range and 50 50 chance  there'll be sellers up here and you'll  get another leg down  and that's what typically happens in  trading ranges you often get breakouts  above prior highs like above this above  that and they fail and then you reverse  down and you get breakouts below lows  and they fail and you reverse up here we  have a low we broke below it and we  reversed up  on the yearly chart this was a  reasonably Big Bear bar last year 2022  with a reasonably big body and it was an  upside down bar however at the moment  it's simply a pullback and a bull Trend  like that or like this or like this or  like that  it closed below its midpoint and it's  outside down  good for the Bears it's also a third leg  up one and then a bear bar two and then  a bear bar and then three and then a  bear bar whenever you have three legs up  you're going to attract some profit  taking and a lot of the bulls will give  the Bears a couple attempts to reverse  it into a bare trend so whenever you  have three legs up I call it a wedge and  when it's in a tight Channel I call it a  parabolic wedge you're still probably  going to get a couple legs sideways to  down so this could be one and then  bounce and then two next year so I think  next year will probably be sideways to  down we could go out for two or three  years and then get a second leg sideways  to down but I think 2022 is a parabolic  wedge reversal in a channel that has  lasted a long time so it's probably  going to be the first of a couple legs  sideways to down  it's a pullback and a bold Trend the  Bulls hope it's a bull flag but it's a  decent Bear bar we have a parabolic  wedge there probably are more sellers  than buyers above its high so if we go  above this high  there probably will be more sellers than  buyers somewhere up here and that will  cause the second leg sideways to down  however the Bold channel is very tight  the pullbacks have been Reef a brief  small pullback here and again here it's  unlikely a bull Trend would go from this  into a bear Trend and therefore there  probably are buyers not far below last  year's loan also last year was an  outside bar and right now we're in the  middle third of last year's range  what often happens when you have an  outside bar is the following year or the  following bar is an inside bar so I  would not be surprised if  2023 was a bull inside bar it would be a  better bicycle bar if it was a bull bar  closing near its high for a resumption  of the bull Trend next year but as I  said this is pretty good selling it's a  third leg up  even if this year turns out to be a bull  inside bar I suspect we'll only go up  for a year or so a bar or so and then  have another attempt to go down maybe a  year or two down and more sideways  there have been many reversal attempts  on the yearly chart and most of them  were brief  there's a 40 chance this is the start of  this a trading range or this or trading  range here we had a new High new high  and new low here we had slightly higher  high slightly lower low but right now  there's a 40 chance this is the  beginning of something that looks like  this or like that this is about 10 bars  that's 10 years it's a decade this is  about 10 bars 10 years a decade we're  going to do this or this or some other  kind of trading range at some point  within the next few years  right now there's a 40 chance this will  be the initial high and that we've begun  the conversion into a trading range  sixty percent chance even if we go  sideways to down for another bar or two  sixty percent chance we're going to try  to go up for several more bars Above  This maybe we'll have to go above 5000  and then this becomes a final full flag  and we reverse back down to this low  remember this is the pandemic low it's  56 percent down from the high there's  currently only a 20 chance that we'll  ever ever get there  and if we make a new high here and if it  goes up 5500 or so this then becomes 60  65 percent below the high so the higher  up we go the less likely we will ever  get down to this price you're never  going to see this price again in your  lifetime it's not going to drop down to  a thousand you're never going to see  this price again in your lifetime you'll  get people on television or on the  Internet making outrageous claims that  will get down to these lows but it's  never going to happen  remember when you have three pushes up  in a tight Channel  it's a wedge on a lower time frame chart  and on this time frame it's a parabolic  wedge we have up and then a bear bar up  and then a bear bar and up  on the daily chart this would be a wedge  it was a wedge on the daily chart on the  monthly chart is a parabolic wedge you'd  expect at least a couple legs sideways  to down one pullback two well we've  actually had three one bounce two bounce  three on the monthly chart  when you have a wedge and you get a  reversal typically you're going to get a  couple legs sideways too up  you might get many legs up but at a  minimum we should have a second leg  sideways to up now I'm recording this  chart on February 5th and I know the  market has already gone above last  month's high but I still think it's a  rally in what will become a trading  range I think there's still probably a  60 chance we're going to stay below this  high and then get a second leg down  how far down will that let go well  I still think there's better than a 50  50 chance we're going here this is on  the marsh contract when March expires  we'll be in the June contract and this  price will be different but 4 000 has  been an incredibly important price I  talked about it as it happened I talked  about it after it happened  when you have two important prices the  all-time high and then four thousand  they often create a measured move to a  third important price so I would say  better than a 50 50 chance that this is  the Target that no matter how high up  here we go we'll have to come down here  if we go all the way back up here that  reduces the chances we'll get here it  increases the chances that if we do get  a second leg down which still would be  likely it will hold above this and maybe  form a triangle so one two three bounce  four and then five  breakout mode since it's in a bold Trend  the odds would still slightly favor a  bull Breakout  what's the worst case scenario how far  down can the Bears push this  whenever you have a triangle in this  case we have an expanding triangle it's  an area of agreement  and the market tends to come back to  that area of agreement if we went to the  downside we probably would eventually  rally back here we broke to the upside  and therefore we may come back to the  middle of the expanding triangle which  is here  right now I think we probably will not  get there but I do think we'll get here  on the yearly chart there's no sign of a  top it should evolve into a trading  range lasting at least 10 bars 5 or 10  years and it should begin within the  next few years there's a forty percent  chance that last year was the start of  the process  this is a bad Buy Signal art there are  probably sellers above  2022 but it's a very strong bull Trend  there are probably buyers below 2022  with Buyers below and sellers above  we're probably going to be sideways for  at least another year or two  I know you're watching this video hoping  for clarity and I am giving you Clarity  but it's not the clarity that you want  the clarity is we're probably going to  be sideways for at least another year or  two what you want to hear is this is the  end of the sell-off and we're going  straight up to a new high six thousand  seven thousand or this is the end of the  world and we're going to go below the  pandemic low but that's not what's  likely what's likely is we're going to  be sideways for the remainder of the  year and probably sideways well into  next year  on television they always put people on  who say things that attract eyeballs and  generate a lot of emotion  because that helps them sell ads so  you'll always get people making claims  that the market is going to go up to 10  000 or down to one thousand it's never  going to go down from one thousand it  eventually will go to ten thousand and  eventually will go to a hundred thousand  we won't live long enough to see it but  eventually it will get up there  because I'm talking about trading range  it's going to be different from most of  the bars on the chart most of the bars  on the yearly chart we've been going up  and on the monthly chart I'm only  showing a small part of it we've also  have been going up mostly we've had some  sideways times for a year or two or  three but I think this is going to be  another one of those sideways times and  not like this and on the yearly chart as  I said 40 chance we've begun this 60  chance and we'll only be sideways for  two or three years and then we'll get  another push-up but at some point in the  next few years  we're going to begin this so I do not  think there's much left to the upside  maybe we'll go fifty five hundred six  thousand and then enter a trading range  for a decade or so 40 chance it has to  begun  again yearly chart probably mostly slide  race this year and probably next year as  well however I also think the market  will develop into a trading range with a  couple  obvious legs down and off within the  next few years and it probably will last  a decade  monthly chart bear Trends are rare so  even though we've sold off a lot I think  we're going to be sideways for the  remainder of the year and I think  there's better than our 50 50 chance  that we're going to get down to that  measured move based upon the all-time  high and a 4 000.  again I'm Al Brooks I hope that you  found this helpful and I hope that you  have a good year