Medium Term Trendline Broken!
OK, good. In spite of an earlier bounce off the supporting trendline, the Dow lost its footing and broke beneath it. The first step in the two-step process I outlined yesterday has taken place.
It's clear the market is losing steam. We're also exiting the strong November-April season and heading into the weaker May-October season. As earnings season approaches, the opportunity for the long-awaited downdraft may be upon us. The next psychological barrier is to break below 11,000. Next, it needs to break below the 10,922 low set on March 8th. That would bring an end to the series of higher highs and higher lows that has been in place since October 13 of last year.
3 comments:
costas1996,
You seem to see way into the future, all the way till the begining of fall. Hope that skill you have, has made you very rich by now :)
During your trading keep in mind four important facts - 1. the stock market is not the economy, 2. the stock market discounts all news before you know it is news, 3. the stock market spends as much time going up as going down but requires more energy to go up, and, 4. the only truth is price - all else is a perception.
If you embrace these facts you will no longer care whether the market is going up or down because you will realize that direction is irrelevant.
Why do I say that? Because of fact 3. While all stocks can drop on a dime, all stocks will neve rise in the same way. A market that rises is led by something. That something is always there - always ready to be bought. In all instances it is very cheap right now and will be very dear later. It doesn't care about Iran, or oil, or a supposed debt crisis, or the price of gold, or the price of pigs. It is there waiting for you to find it. Your job is to find it.
If what I say isn't true then the market would no longer exist because it can not go below 0.
-+Tim , try to look at the DOW in term of gold , looks very bearish , gold is set to continue and out perform the dow , also higher gold prices will allow higher dow.
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