Stock Market Analysis

Monday, January 02, 2012

Happy 2012~~!!!

Happy New Year 2012!

This is my first post for the year 2012 and 2011 has truly been a challenging one.

Surprisingly, even though 2011 proved to be uncertain and painful most of the year, 2011 actually turned out to be a slightly positive year overall with the Dow gaining 5.5% and S&P500 closing at par with 2010's close. The Dow also made a third year of gain since 2008, which on a yearly basis, continues the recovery scenario.

So far, the recovery from the 2008 crisis has been volatile but steady with volatility coming mainly from the Euro zone. I would see 2012 as a year of resolution of most of the global issues arising out of the 2008 crisis before the real bull market can happen. However, the market is also at a point where it could easily melt back down into an intermediate bear trend or primary bear trend if we don't see a breakout and strong support around the 12,500 level.

Indeed, the world is in uncharted territory and much has changed since the 2008 crisis in terms of investments as well as business. We need to be able to co adapt to the changes and adapt our mindsets as well. Investors need to be more and more patient and be able to expand their arsenal of investment weapons in order to profit consistently under such market conditions. It is no longer enough to be able to profit under trending conditions (using swing trading methodologies such as my Star Trading System) but also under volatile sideways conditions (using position trading methodologies such as my Ride the Flow system). Yes, this is the era of the sophisticated investor and even small retail investors and traders require such sophistication to make any kind of profit.

As such, I would say the theme of year 2012 for most retail investors and traders would be "EDUCATION". Most have seen how hard it is to profit in 2011 and this should trigger the need to get more sophisticated and educated. Remember, the first investment for all profitable investors and traders is in oneself.

Here's wishing everyone, an exciting and fulfilling 2012!


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