Well as we expected we got a shallow bounce last week but by end of week market managed to give back all the gain made during the bounce. The BIG question is where is the market headed? It seems like we have entered BEAR market territory.... From below BPNYA chart, we can see BPNYA is well below 30 and EMA(30) is not even close for BPNYA to cross in next few days. This tells us that we should be patient and wait for a BUY signal [BPNYA crossing EMA(30) upwards]. But what does this mean for the market!!! Is Market going to stabilize here or go down further? We believe that market (NYSE) may continue to be in the range between 6900-7500 or more likely stabilize near lower end for next week or so. With this sort of action, market will come out of oversold condition. Depending on global economic news, market may stage next rally attempt (less likely unless something drastically changes) or gradually grind lower. If global economic conditions deteriorates at faster pace than another plunge is in the cards. No one can be sure and markets have tendency to do unexpected. As long as we are out of market we don't care! ONLY when we get BUY signal we will enter the market.
Our long term outlook for the market is that we are in BEAR market now and most likely this might take several weeks to months for the trend to change to BULL market. However, we might get intermediate rallies and our model will tell us when to enter/exit. You might be wondering as to what tells us that we are in BEAR market and this is not just a bigger correction!!! STAY TUNED.... we will post our analysis on how we arrived on our conclusion.
Andre
8/23/2011 02:32:20 pm
Keep up the good work we enjoy reading your ideas! Comments are closed.
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