Settle in and prepare yourselves for a pullback here. Everything technical is suggesting the stock market will pull back. We are at a strong resistance point here. I just want everyone to be prepared, the news is screaming 11,000 and more to come. Some are also suggesting this means the recession is over. I personally think this is insanity.
Does anyone know why the stock market went up? Yes, it was an oversold bounce from March 09. Were there more reasons you ask? Maybe, but none that I’ve seen. This rally has come on low volume while the market was at a bottom and way oversold. During this time, the worlds economy was also going very poorly. With everything looking bad the good old U.S.A is as stable an investment that you can find especially when the technical analysis screams buy.
Unemployment bad, business tax situation bad, new hirings bad, gas and oil bad, debt bad, housing bad, and the stock market is running why? In my opinion its because of Technical Analysis and timing. During the election race and the end of the Bush cycle the market besides being oversold went down more than it should and there is some correcting going on. In order for the market to hold 11,000 and keep on running it will require some good things to happen and I do not see that happening at the moment.
According to the numbers there are a lot of day traders in the market but major investors are bearish on the current situation. Investment advisers begin to turn bearish at these types of major resistance levels. The safest bet for them here is to watch their investments but invest nothing new. This creates a tired look in the technical analysis, a kind of rollover point.
Don’t run out and sell your stocks today then start shorting ,but set up your portfolio for sells to maximize current gains. Figure out what you will sell and where when my call is proven to be correct. Never jump the gun on this type of call, You don’t want to sell to early or begin shorting too early. This can cost you a lot of new losses and missed gains. Today If I was trading the Dow, I would sell it and wait for a pullback, if I still wanted to own it. Then when it began to head downward I would short it to make some gains on the way to my pullback point. I will trade the stocks I own in a similar fashion. Some are ready to sell now and others I can give a little room to wait
This is my advice. I am not your professional trading adviser but I do understand the market. I am not a professional and any mistakes made are yours I can’t be liable. Keep it simple and take my advice to look at your portfolio here, either alone or with your trusted financial assistant. Play it right and you can capitalize on your gains and the downturn in the market, not like the last time it crashed when you just held on for dear life.
