SPX (Trading journal notes): To crash or not to crash, why even ask the question. I skimmed through some comments a friend made regarding markets and some on here and I'd like to just get the long term bearishness out of the way. I'm already prepared for the SPX to test the corona virus lows. I don't ultimately believe it will happen if I had to guess, though I'm currently prepared allocations wise if it did. 

I'm currently watching the 9 year moving average and it was previously just below 3,200. Other areas I'm watching shorter term are of course the recent low from Friday, though more interested in the 30% from 4,818 highs last year. That would come in at 3,373. We already hit the 25% off mark at 3,612. Markets tend to overshoot on the down and upside, so I think the 3,000 area targets being suggested by Morgan Stanley and others aren't out of the question, though I also think it is worth asking the question what if some things go right. Sentiment overshoots as well, so when it does turn, it can and often does during a particular day and never looks back. Look at all the past crises over the years. Yes, it is true that monetary policy has often been supportive of prices, so take it into consideration. I actually think 2023 is setting up to be a better year than thought after possibly whatever events need to occur. If we do have a capitulation, it would be a tremendous buying opportunity, possibly for years, and the beginning of a new bull market. 

When it comes to strategy, I have no emotions, I'm buying and selling based upon risk/reward, then waiting. I've lived through several crashes now over 25 years or so investing. They have been opportunities to build wealth. This is no different. It is important to also remember that this is a business and those controlling things have to make a spread on their inventory. Eventually the world goes forward and markets go back up. If they don't, then there will be larger concerns than how my stocks are doing. And we are prepared, with guaranteed bonds, cash, and plenty of other levers to pull that aren't related to performance of the stock market. 

That being said, as I mentioned Friday, I have two entries now currently along side the QE 3.2 system (for trading purposes). I've made no new long term investments in my other strategy, though still do have some exposure from assets I bought at lower levels years back. I sold some of my allocation to equities at 4,800, 4,600, and most recently 4,300 after the fantastic rally. What is needed in the times right now is context. I look at my actual figures and we are fine, no need to panic, and definitely no need to read endless articles or watch endless market videos, look at charts for the millionth time, etc. One review is enough. I'm looking forward to putting more cash to work in equities long term when it becomes clear it is time to do so. Prepared and going back to life while things play out.