Market has experienced 4% pullback so far in last two weeks which can also be considered as a normal pullback in a BULL market. However the key question will be "Is this mere a pullback or start of correction?". So what clues should we look out ahead of time to exit market before major correction is in full swing!!! BPNYA well below 70 mark and EMA(30) suggesting market is either in pullback or correction. Volatility index ($VIX) is rising rapidly which in turn drags the market down with wide swings. Daily NYSE chart suggests that market is resting at support and probability of bounce is higher at current level. However the bounce may be short lived and capped at MA(50) line. Weekly chart below suggests that further downside cannot be ruled out. Based on below chart, probability of bounce is very high as every time NYUD line touched EMA(21), it has managed to bounce and market was able to continue the BULL trend. Charts are telling us that probability of a bounce is very high, however if market is not able to hold 9900 level and breaks through then it would be wise to get out of the market and stay on sidelines. This pullback has a potential to become a bigger correction especially after an extended BULL period.
What does it mean for our Investments?
Market in pullback hence be careful... Comments are closed.
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