Sunday, January 20, 2008


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As promised, I post a chart with some points. This time I used NASDAQ 100 chart, however, majority of the indexes, including S&P 500 and DJI indexes look similar. Some difference could be seen on the DJT (Dow Jones Transport) where the lowest point was hit on January 14, 2008, while on all other indexes it was on January 18, 2008.

I’m on the Bull side. More and more I believe that we are on the edge of the strong reversal. It could be tomorrow, it could be in several days, but, I assume that the market will move up and it will be much higher then we are now.

SP 500

All indicators point to the extremely oversold market in short period of time (2 weeks). The only VIX shows the high values that may indicate that we may see further decline. Even if we are in the long-term run down (I would not state it now), for further move down the market in need a correctional move up.

The most challenging question for many traders could be when to open or close the position in the current situation. I usually do not talk how to trade but in the current market it’s would be scary for me to play short, I would rather stay in cash and wait for up-trend confirmation indicators or open a long trade without stop-loss (in such volatile market the early opened long position may result that the stop-loss could be hit very easily) with possibility to wait in case the market drops lower.

Of course I could be wrong. It my personal view on the market, and I do not really believe in news, especially those that are published on the Yahoo Finance and CNN money. I’m sorry if it goes against what the news state - this is lust my opinion on the current market.

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