Market is on a roller coaster ride from August onwards and last week is no different. Will this push higher is for real? or just another wild swing!!! Below charts might tell us the probable market direction from here... Below BPNYA chart shows that soon we may get a BUY signal if market continues to move higher. On what basis we know this won't be another fake signal!!! Well, we are not buying a Certificate of Deposit to receive a guaranteed rate. In stock market, there are no guarantees, its always a game of probably. As long as odds of winning are on our side, we stay in the game. The moment our risk increases, all bets are off the table... Below NYSE chart tells us some key information. See how chart 1 & 2 are very identical in nature. A sudden drop followed by volatile action. Now take a look at Chart 3 (extension of chart 2), once a base is formed for around 2 months then market starts bull rally which last for almost 2 months. The rally penetrates 200 day moving average (red line) followed by a gradual decline which further ends up in major financial meltdown of 2008 (not shown in chart 3). We believe in history repeating itself, which means market should push higher from here (Chart 1), briefly cross 200 day moving average (red line) only to slide down gradually further. Events leading to next Market action:
Do not expect all this to happen in few weeks but rather it will take couple of months. 1st two scenarios will be revealed before end of this year. 3rd scenario will develop gradually and shall hit very hard. Stay alert and have a plan... |
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