We got our oversold bounce today. What reason is there for more upward movement? What incentive is there right now for buyers? If earnings reports continue to be good, then it would create buying. But high energy prices and hurricane damage could keep earnings down. If the hurricane damage is minimal, that would cause the price of oil to go down. The market may think Gulf area rebuilding efforts are going to stimulate the economy. any thoughts?
What's needed is $100/oil Interest rates at 10% Maybe then the dow might decline another 100-200 points? Or maybe it'll even go up some more? The news jokers always find some 'logical' reason for the latest move.
The sell off this week in the index products has been really well executed as shown on the chart of the ER2 attached. This is a text book H&S formation trade. I'm not a long term trader, but it would seem to me like the market is likely to fall again before it challenges any highs. Have a look at the chart and share your thoughts, if you would.
I keep thinking we bottomed. I think can safely say am one of the few bulls in this board... ...and so far this attitude has paid off.
Hi Bitstream, I'm neither bull nor bear. I perform equally in both markets. I trade whatever action happens to be in front of me since my time horizon is so short (scalping). The chart is an illustration of how well this target on the H&S pattern in the ER2 was executed (206 ticks from high of head to trendline projected down will give you the low of the day today - the pink line). As usual, I see these things after they happen.
From a techincal point of view, I can see a bounce off of a good resistance level on the IWM chart. But I am more interested in fundamental reasons that technical.
Hi FT71--I think having a view on market direction is useful in day-trading, especially now that we are close to year-end and anyone can make up his own mind. I also trade what I see but being a bull has helped me going fishing for bottoms and picking up nice trophies.
Oversold bounce? Where. I don't see an oversold bounce. Your seeing things. This market is OVERBOUGHT!
Too much liquidity available to buy into the market to keep it from falling too far. Air is coming out of real estate and bonds are stale. Where else is the money going to go??? Gold and Oil? Both markets are too small to accomdate huge inflows. There are thousands of funds out there with cash that they have to invest. They are buying these pullbacks. They have too. What else are they going to do?? Give the money back to investors and close out?? The only thing that could cause problems in some fund collasping and taking a bunch of others down with it. This Katrina thing is much deeper then is being discussed in the media. You basically had 200-300k households walk away from their houses at once. Is there some spread out there that is going to get wacked if all that hits at once?? katrina is a black swan and a black swan is what did in LTCM a few years ago. John