Every dip in the market is being bought aggressively. All those who missed the rally (started in last week of December) are eager to get in at any cost. Hopefully readers of this blog/site were at peace and did not exit the market prematurely. However, the BIG question is how long this creeping higher can continue without a real pullback/shakeout!!! We shall see some increased volatility in the market from here on, WHY? Market has been consistently moving up for more than two months without any significant pullback or sideways action. We saw how last weeks dip was bought aggressively. This can be considered as an initial sign of coming days where market volatility will increase. Most likely we shall get our SELL signal in next few days. Below BPNYA chart shows how close we are in triggering our SELL signal [BPNYA crossing EMA(30) downwards]. Also do not forget the fact that BPNYA is above 70 for quite sometime and historically market cannot continue its uptrend beyond 3-4% gains after Sell signal. A pullback/sideways action is highly probable which will tend to increase volatility. You might have noticed that in above chart below NYSE chart you can see $VIX chart. It measures volatility in the market. Don't worry about it but something to be aware of as an information. Typically, higher volatility is not good for markets, for now its low but can change rapidly. As long as we follow a plan, we will not fall into any trap and always be ready to protect our capital.
Be alert and cautious... Comments are closed.
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