Has The Stock Market Bottomed?
Has the stock market bottomed? That's the million dollar question that is on everyone's mind now that the dow jones has posted its largest daily rally since the depression. Today the Dow Jones Industrials rallied 936 points on very heavy volume.
In my opinion I think we are going to see a rally up to the 50 day moving average which you can see in the above chart. I still believe that the long-term trend in the stock market is down and I will patiently wait for a rally to enter the market on the short side.
One very important thing to keep in mind is that just because I am bearish long-term does not mean I must short this market. I need to see a rally FOLLOWED by some kind of bearish setup to take place in order for me to get short this market. An example of such a setup would be a reversal day at the 50 day average or a rally that is not broad based...etc... As of now I will simply watch the market and let the market tell me what to do or not to do.
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1 comment:
Agree with what you're saying. lower LIBOR rates and a drop in gold also confirm a short-term rally is here, though this is still a deep bear market, in my opinion. will be looking for fib lines and reversal candlestick patterns at resistance levels to find short opportunities.
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