Above chart is from another blog side, you can decide which stage we're in, I think it's close to the peak than bottom.
- Today is the first big drop in Dow since April 11. Is it a one time dip or this is the first blood in a correction?
- Tomorrow and Monday's action will tell. I think this is the first blood, we'll see a normal 3% drop in a overextended bull market first, it may stop right there, or it may turn out to be a 15-20% correction that usually happens during summer time. Time will tell.
- I see lot of great comments today. Min has a good observation that China won't let a stock market crash to ruin it's Olympic Games in 2008, but I think China can't control a hot stock market bubble for too long. They'd better manage it than let it grow out of control.
- David did the best by selling QID at 52 and bought back at 47. Great move and money management.
- It's wise not to buy the first dip, specially after a long and overbought rally. I added SPY puts today. It's really cheap, even after today's drop, there is not much risk premium in the price.
- Almost all major indices broke 10MA today, so short term direction is down. And another down day tomorrow and on Monday will let bears back in control.
- The volume expanded today, but not much. It's not a convincing move, and lot of longs are still sitting, so we have more down side to go if people start to exit. Usually, a bear market has a way to keep people in the market and a great bull market has a way to keep people out of it.
3 comments:
I really enjoy your site--keep up the good work. What I find most compelling this week is that first we here the consumer is "resilient" because of increade borrowing (credit cards); then we here retailers had worst month ever. Obviously consumer is not resilient, but tapped out, robbing Peter to pay Paul. Perhaps the consumer is even using credit card money to pay mortgage, etc. Disaster in the making...
I'm not quite awake here (5:50 am), so I need to correct important mispelling in last post: I do know how to spell the word "hear." How discouraged should we be if market doesn't correct further today? I believe DOW will go back under 12K in the next few months. Wishful thinking?
You're bad. Really bad. Give it up!
Whenever you think it's a turn, you're wrong! Your timing is off, your prediction is wrong! Why don't you just shut up and give up! FA bears no fruit, use TA and don't listen to your FA voice. But you just don't have any talent in trading!!!!!!
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