As of Thursday and Friday, it appears most likely that the stock market has made a major bottom. One reason for hesitation is that the panic in the credit markets reached an unseen level, so we are in some sense in uncharted territory. However, form a contrarian perspective, unseen panic is what you look for to initiate a longer term investment. I suggest reading the recent posts from the Useful Trading Blogs section if you want to get further historical reference for the type of price move that has occurred in the last couple days.
The short-term model that I use to recommend index ETF trades on this blog is overbought indicating that the market may see some selling soon. Typically this is what I want to see to recommend an inverse ETF that will appreciate as the market falls. However, with the likelihood of a major trend change occurring, I am not going to recommend anything right now.
If you would have compounded all the gains from those trades I recommended using this model since April, then you would have about 30% gains or so since April. That is very good, and should give you plenty of patience to wait for a more clear market direction to make the next move.
Pete
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