RE:Happy Death Cross Day! (From the Warning Siren Chamber) Recall that the 50 DMA will crossed over the 200DMA. Very bearish.
And any close today below 2.23 means 9 weekly red candlesticks in a row. As I mentioned, these slow motion car crashes have only happened 3 other times and the end results weren't good.
As a reminder ....
Pull up Socrates favourite chart view: the beloved weekly candlestick chart.
Plot the 10,50,100 Weekly Moving Averages (WMA). Make the timeframe back to 2015.
We are now 9 red weekly candlesticks in a row. Closed below the 100WMA for the first time since March 2020 last week.
We haven't seen such sustained dogsh!t performance since the collapses in 2016, 2017 and 2018.
As a reminder, those collapses had (1) 17 out of 18 down weeks. (2) 18 out of 20 down weeks and (3) 23 out of 28 down weeks.
The total negative return for each was (1) -51% (2) -47% (3) -44%
See the common pattern. They all closed through the 100WMA. Happened four weeks ago again.
The total negative return for this drawdown is only -24% so far. We are just about at the half way point through the drawdown. Will the pain continue? Or will they announce real news before the quarter? Or will the quarter drive an even further drawdown consistent with historical precedent.
Achieving the historical precedent on the prior three drawdowns gives you an end point range of 1.39-1.58, which is a 3.0-3.3% dividend yield. This seems reasonable with the debentures at 6.2% yield. But the yield will be closer to 7% at that point.
Who knows? But we've all placed our bets.