Ronald Reagan: "When Mr. Carter became president, inflation was 4.8%. It is now running at 12.7% — We don't have inflation because the people are living too well. We have inflation because the government is living too well.."
This topic came up in the discord today and figured would share for educational purposes...
For any long biased swing traders that are getting chopped up, here is a piece of advice for identifying good vs bad market conditions:
Get long the market and buy setups when the Nasdaq / $QQQ is trading above its 50 day moving average and sit 100% cash when it is trading below its 50 day moving average.
I conditioned the colors on this chart to represent trend above 50sma vs trend below. The long periods of green are likely easy dollar environments, where you want to be participating. The sharp, brief periods of red are where you can get chopped to pieces.
Very simple and effective concept, but most do not have the discipline and patience to see the results.
This is a play on Qullamaggie's 10&20 MA concept, but I have used the 50 day moving average for a cleaner visual.
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