Intermediate Bear Trend... CONFIRMED...

Unfortunately, the 205 points dive in the Dow today confirmed the intermediate bear trend that was developing over the past 2 weeks. Right now, a revisit of the March and January lows look set to be in the near future. Opening up the time scale, we can clearly see that the market is in a period of turbulence that we have not seen since the great bear market of 2000 to 2003. 5 good bullish, low volatility, years have gone by and now, traders and investors are put through the mill again with economic challenges and worldwide issues that none have ever experienced. This period of time disillusioned and disheartened newbie traders most of all as nothing seemed to work. For veterans like us, this is a period of truth... those that remains after all these are through will be those that make it big in this industry. It is a trying period not only for traders and investors but for people all over the world. High energy and food prices have drove mankind to the edge of misery. Soaring food prices in many countries took millions of people by surprise as some of them could not even afford to eat anymore. Soaring energy prices doubled gasoline prices in some countries, resulting in soaring transportation costs, wiping out the last few cents of executives all over the world. So why the heck am I still not speculating on energy and commodities like some of you asked? Because I see the turmoil all over the world now and REFUSE to be one of those that pushes prices any higher! I REFUSE to be one of those whose world is only as big as the trading pit and does not go out into the world to see the state it is in now while money is being made on energy and commodities. Folks, we could be in for a period of worldwide catastrophy that no economic modelling have ever predicted. Driven by greed and scarcity, the powerful have now driven the common people's life to the edge of misery and will soon backfire upon themselves. Economics is a double edged sword... it could bring stability to the world when used by the right hands and it could create worldwide misery when used by the wrong hands. The Axis of Evil exists but not in the form of nations. The real Axis of Evil exists in the form of a few powerful individuals all over the world empowered with the tools of economics but driven purely by greed. No matter what trend the stock market is in, the trend in the world right now is headlong into misery and for me, even though I am powerless to change the world, I hope to bring awareness to this situation as we watch the stock market play out with our money from day to day.

With the market confirming an intermediate downtrend, you might want to start tightening up on your stop loss or start hedging some of your positions. In the US, you could easily hedge your stock positions using stock options. In other countries, you could as easily do it with warrants. Read my article on the Differences Between Warrants & Options.