We have established according to the definition that the JSE is undergoing a correction in the market.
I don’t think this is just a simple market correction.
According to a 75% winning break out pattern, it looks like the JSE is going to drop even further.
The M formation is telling me the JSE is still set to drop further to 47,160
The M formation is one of my reversal break-out profit patterns.
All you need to know is that the price of the market forms what looks like the letter M. And then the price of breaks below the letter M which reverses and continues to the downside.
To calculate the target of where I expect the JSE Top 40 market to drop to next, we use the breakout pattern formula. First you’ll need to know what the High and Low of the M formation prices are…
Target=Low of M formation - (High of M formation – Low of M formation) Target=51,140 - (55,120 - 51,140)
As you can guess, I believe this correction is going to continue to the downside all the way to 47,160. This all together will be a 14.44% correction from the high…
So what should you do?
Well, 14% is more than a normal correction but nothing to panic about, with regards to your investments…
The stock markets tend to correct and then shoot up to new highs, as we’ve seen over the last couple of centuries.
Only if the JSE Top 40 market drops below the 47,160 target mark, I’ll simply write to you to tell you about the new target and what you should do to hedge your positions.
The reason is, below 47,160 the JSE will not only be in a correcting (down) market but will also enter into CRASH MODE.
But let’s not jump the gun just yet.
Until then, you can look at selling or (shorting) the local and international markets.
This is where you sell HIGH, Buy LOW and profit from the downside of the markets.
If this sounds like something completely new to you, then you’ll need to know more about how this kind of profiting works…
I offer you two options to get your portfolio up during these downtimes.