Dragon Tail Formation On The Dow Again!
Well, last week's market action really did scare the wits out of many small time, amatuer investors who flooded major investment forums with questions like "Is this the start of a market crash". First of all, let's put the record straight... the Dow RARELY crashes! In fact, over its history of over 90 years, it has only "crashed" twice! And that 2 crashes ALWAYS rebounds and ends up higher! So, I really cannot understand why every investor is so worried about market crashes. If you are worried about losing and market crashes, then you should think long term investing instead of short term trading.
The Dow was down marginally on a week to week basis and has halted it's decline atop its weekly 30MA line. The Dow also formed a dragon tail formation last Friday on the daily scale and that usually led to a good rebound. The last time a dragon tail formation occurred was back on 14 March 2007, which literally started a 4 months rally. I remain optimistic and I hope all of you will too.
Dow Technical Chart By Best Charting Software TC2007!
posted by Jason Ng at 9:33 PM
1 Comments:
Thanks for the common sense reminder that this is not the time to panic. This type of volatility is clearly not unusual. Most importantly you remind investors that crashes are extraordinarily rare. This may even be the ideal time to start buying homebuilder stocks--they have been in a two-year bear market and have now reached what many would agree are attractive valuations.
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