Last week, US Congress managed to pass a last minute deal which sent markets flying high. In a week, market recovered from pullback and is now challenging HIGH's. Should we get in the market now? Did we miss the UP side? If you has been following this blog, then most likely you might feel that you lost an opportunity and all those gains market made in past few days were lost. BUT, imagine a scenario where Congress failed to pass a deal then market would be down BIG time. In short, its game of probability and we try to stick to the side where odds of winning are higher which in turn means that the odds of losing are lower AND does exist. What can we identify from below chart?
Both items above suggest that market may soon experience pullback/correction/sideways action. Typically when BPNYA goes above 70 mark then its time to be cautious, expect volatility. Also when $VIX falls below 15, typically market has hard time to climb higher. Market managed to breakout with a HUGE Gap UP. BUT can it sustain the move and keep going higher? Usually, anytime market makes a huge move in either direction, it needs some time to digest the move. Typically, market digest the move by either going sideways or pullback. ONLY in time we will know what will it be!!! On weekly NYSE chart, it is clearly visible that market is near its 2011 high which could act as resistance before market's next move. Also check out the less volume on the last weeks move which puts the move in suspicious category. At this point, it would be wise to wait before jumping into market. Especially if you are not invested yet then have patience and market will present another opportunity to get in. It seems like market may soon experience pullback/sideways action.
What does it mean for our Investments?
Market in bullish mode but be cautious... Comments are closed.
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