Bulls Are Looking for a Bounce After Slow Start to August

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Not long after I met the PitBull he asked me a question, “Do you follow the winners?” I responded by saying, “Of course I do!” His response? “That's good because I don't want to work with anyone that follows the losers!”

Over the 14 years of running MrTopStep, I have seen just about every form of research and indicators and only a few caught my attention. When I hooked up with Rich Miller, I knew right away that his service was something I wanted to include in my trading tool box. Over the weekend while Rich was hiking in the Colorado mountains, he called me to say he had a study done, called, “The S&P Yearly and Monthly Road Map.”

He said that he wanted to give it away for free — so here it is.

I do not know how many hours it took to make this study, but I am sure it was a lot and as we spoke he said he noticed something he wanted to improve. As I have said, Rich has spent close to 15,000 hours of coding long-term statistics. This morning I encourage everyone to look over the study, share it with other traders and on Wednesday at 11:30 ET @HandleStats is offering a 30 minute webinar to break down the study and take questions. We will include a link on Wednesday morning.

Our View

I still think the ES goes lower, but two things stick out.

First, you cannot sell into the weakness. Second, while the ES has been going down, it's by no means getting killed.

So far, the S&P 500 is down in 8 of the last 10 sessions, (while one of those “up” days was a gain of just 0.03% with a 1.3% fade from the session high to boot). In that span, we’ve had a peak-to-trough decline of just 3.16%.

They say when China goes down, the US does too — or that was the case when Evergrande collapsed, one of China's largest real estate developers. Even though it “only” lost $81 billion, it created a lot of problems.

Now, Country Garden Holdings Co., run by one of China’s richest women Yang Huiyan, is coming under significant pressure. Shares are plunging and hitting a record low as trading in its bonds were halted. Earlier this month, worries of deflation in China sent US stocks lower.

I don’t know how all of this plays out, but China is the No. 2 economy in the world. It has been limping out of its post-Covid recovery and if it goes down, it will be felt.