In December of 2021, our proprietary market top indicator, the CakeTrades PCRI's, printed a sell signal. We issued the warning to our members, and global equity markets began the plunge that lead to the ongoing 2022 bear market. As with any sell signal, we never know how bad the damage will truly be, though we can estimate using a combination of market breadth and technical studies. However, like in 2018 and again in 2020, we saw a decline that came suddenly and caught many by surprise. Unlike these other periods though, our indicators never printed a bottom signal, and instead printed a sequential sell signal. This was the first time this has happened in the history of our indicator! Members got...
The foundation of our work here at CakeTrades consists of what we call the Put Call Ratio Indicators (PCRI's). These indicators consist of custom tools that measure market positioning and sentiment, which work together to signal both minor and major market tops and bottoms.These signals have a remarkably strong historical hit rate, but we'll cast that aside for now and focus instead of the most recent equities top, which occurred between the last week of December, 2021, and the first week of January, 2022. As of the date of this post, the S&P has suffered a total max drawdown of 12.3% from the January 3rd high of 4818.62, making this the worst since month since March 2020. The Jan 24th trading session was especially brutal, with...
