Missed the Boat?

Igor Manukhov - Sep 01, 2023

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Market rebounded from the mid-August low. If you have cash, be patient. Wait for a bad day to invest.

August has been a roller coaster month. At one point, the market was down over 3%. There was a tremendous rebound in the last week. I believe we are in a bull market, so you want to be invested and ride the wave of recovery. I would advise against chasing the market and to wait for a bad day to put funds to work.

Another important setup to look out for is negative momentum (MACD indicator, middle panel) and participation divergence (Bullish Percent Index, BPI, red line on the bottom panel). Divergence occurs when the market makes new highs but momentum and/or participation readings fail to surpass the previous high (pink lines highlight previous instances of divergences). Notice how the market pulled back after divergences. Looking at the current market setup, assuming that the price surpasses July high of 4620, I would watch carefully if this move will be supported by increasing momentum (MACD) and/or increasing participation (BPI).

So far it looks like we will have another divergence coming. That is why, if you are fully invested, I would keep calm and carry on. If you have cash to invest, deposit it into investment accounts, but wait for the market to take a breather.

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Missed the Boat?

Igor Manukhov - Sep 01, 2023

Market rebounded from the mid-August low. If you have cash, be patient. Wait for a bad day to invest.

Igor Manukhov

Peter Kuntyj

Yelena Manukhova

Brittany Stone

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