The Dow Tumbles... At Long Last...
FUNDAMENTAL ANALYSISThe wild bull shakes it's rider off at last today as the Dow tumbles 147.74 points in a single day today, shedding off 1.11% and 5 days of gains. In fact, this is the hardest single day drop since 13 March. Well, like I have said, the longer the rally, the harder the fall... looks like it is happening at last. US trade deficit opening to a 4 years high along with import prices rising 1.3% due to a weakening dollar has once again brought inflation fears to the front stage. The earnings season is also coming to an end. With no more explosive earnings to cheer investors onwards, it may be hard for this rally to continue. This may be the correction which so many have speculated about for so long.
TECHNICAL ANALYSIS
The Staircase formation in the Dow is shattered at last with the Dow hitting the ultimatum level which I set 2 days ago. My trend indicator has also indicated a definite shift in short term trend to bearish. These are definite signs that the correction that I am anticipating is here at last. I took the opportunity to take profits off the table today but not shorting the market... yet. This is because the long term bullish trend still remains intact, for now, and I would see a possible rebound at the 13000 level.
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posted by Jason Ng at 6:51 PM
2 Comments:
Markets behave in an erratic manner. Market was expecting the Federal Reserve to hold its interest rates. And as expected it did so. Even then a day later market falls on back of possibility of inflation. 150 points drop on dow is huge. I just wonder what would have happened if the Federal Reserve had raised the interest rates!
Also, in ECB and BoE made decisions on Interest rates well within the expectation of markets. Still at the decision there was an overall decline in the market.
I am wondering if economic indicators have efficient predictive power over markets. In my view it doesn't.
-from
sharemarketindia.blogspot.com
Erratic? Seriously, I don't think the market is erratic at all because it seems to follow my every expectations so far, if you have been following my analysis daily, you will see that the market is almost always moving in the way that I predict it will.
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