The answer is it is difficult, and not easy, and not because it will be a certain number in your particular case. The same thing applies to all the variables that can drive the stock market and affect the stock market in all kinds of ways – the economy, political developments, etc.
It is possible to have a swing low and a swing high. It is even possible to have a swing low and an equally significant swing high. But if either of those two are not high enough to warrant a new high, and a low is close enough to make a new low feel high-end to the investor, then that is likely to be indicative of what is in this “sweet spot” or range.
In other words, this is not a formulaic method that can tell you exactly whether your asset price is in a sweet spot or not, since the difference between the two won’t be exactly the same.
There is also a method for measuring when a stock or bond market rally will run its course. That method is called an investment bounce. An investment bounce is a measure given a stock or bonds price, and as you look down from the peak or trough, you can see the price going up and down based on the recent moves in the market.
This bounce may not happen immediately following new highs or lows. It may take several weeks, months, or more, depending on how much the market has rallied since the peak or trough, and how long the stock market rally or bond rally lasted. There is no formula, or formula given as an algorithm, which can tell you what will be the end of a rally or how many bounces you can expect.
There are two major types of investment bounces that can be tracked in the market (more on that later).
The other type of investment bounces is known as a reversal – when an asset price suddenly reverses higher or lower. This type of bounce is also tracked in market movements.
An investment bounce is a useful tool for investors, but is also important to realize is based on one key factor which is often missed when looking at asset prices: momentum. Momentum is the concept that an asset’s price moves in part due to buying and selling or buying and holding or selling that asset.
A high level of momentum is also needed in order to move an asset price forward or backward. In other words, if an asset price has momentum then there is a possibility that the price of the asset could move up or down at a time
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