What A Historical Week!

Yes, we definitely witnessed a historically volatile week last week! In fact, that was the most volatile week that I have ever seen in my 13 years of trading and the biggest mess that many well known economists and investors have ever seen. Such a volatile week definitely benefitted volatile trading strategies such as my Ride The Flow System as we closed the trading month with an overall portfolio profit of over 8%!

The Dow totally reversed its bearish breakout and is now back into its neutral trend on the "Papa Go-To-The-Beach" promise and it seems like "mama" is casting a lot of objection on the beach going plan. This mess is going to take many more years to clear up in the economy, that's for sure. However, the stock market, being a discounting mechanism, will certainly move much earlier than it takes for the economy to recover (we saw that back in 2003 when the stock market has moved up way over 10% before the economic numbers start coming in slightly favorable). I am already seeing the capitulations which usually signal the end of a bear market and will continue to look for more precise signals in the daily charts as this develops.

This week is going to be digestion week for all the news produced last week and will not doubt be a volatile week with little chance of any breakouts.