Will Friday's rally continue or was it just a "dead cat bounce"? There is no doubt about it, we have been seeing lots of volatility in the markets. Is it likely to continue? Like in the past, it will continue until it stops and the market settles down. Nobody can give you an exact timeline when that's going to happen, but it will happen. In the meantime, having a solid game plan, one that you know has been successful in the past, will lead you to successful trades.
You've heard me say this before, the market can only move three ways, it can go up, down and sideways, that's it! When you boil it down to those simple terms, it is easy to see how investors can create many of their own problems by over-thinking a situation. You may have been guilty of this yourself at some point in time, I know I have. It is so easy to get caught up with the hubris of the market and lose sight of your investment goals. It's also easy to fall into the trap of listening to too many talking heads. Oftentimes when this happens, it leads to confusion and will leave you in a state of paralysis.
Just looking at the market and using a simple game plan, like the one I use here at MarketClub, tends to keep you on the right investment track. According to the Trade Triangle technology, the trend remains down regardless of the strong rally that showed up on Friday. That rally could easily have been caused by bargain-hunters and the shorts covering their positions.
Today's video includes a look at the general markets and the recent price action in gold (FOREX:XAUUSDO).
I would like to thank all of our members who participated in "Our Most Important Poll Ever". We had some amazing comments and feedback from members, some of whom have direct information about the CDC and others from parts of Africa, giving us an "in the trenches" ground view of what's really going on. If you haven't checked out this poll yet, you may want to do so today and share your comments with other members.
Here's your invitation to interact in a friendly, non-confrontational manner with other members and with the MarketClub team. Let us know what you think is going on in the markets and what you're looking at and trading. The greater the interaction we have between us, the greater the understanding we will all have as the markets march through time.
Every success with MarketClub,
Adam Hewison
President, INO.com
Co-Creator, MarketClub
How about a follow-up? Was that the sharpest V-bottom in history (X percentage drop/reversal completed over X number of days)? How did volatility like this play out in the trade triangles - and in your psyche?
Rasesh,
Thank you for your feedback and question. To be honest, the rally has surprised a lot of people myself included in its strength. Having said that, I'm going to rely on our Trade Triangle technology to tell me when and if the intermediate trend has reversed. As far as the long-term trend is concerned, we may have planted the seed of more pressure on this market.
Again there are many people who are concerned about the economy and the direction of the country and on the other hand their are plenty of people who say that as long as the Fed keeps interest rates low the markets going higher.
Thanks for contributing your views to the conversation, much appreciated.
Adam
Adam Hewison
President, INO.com
Co-Founder of MarketClub.com
Much Thanks for frank and honest replying.
Yet not fully confirmed, but still, even intermediate trend too, fails to provide any reliable reversal moreover, intermediate trend often either misleading or illusive, so it should be analyze far more cautiously.
And as far as FED’s Lower Interest Rates Policy is concerned, about that one can ask simple question like “How Long It can be possible?” and what will be afterwards? And the Same question can be asked about “QE –Bond Buying program, which is too, closely concerned with Stock Market.
Finally, if there is too small balloon there will be a risk of burst, if blowing air beyond its capacity, and if there is too big balloon there will be a risk of burst capacity of blowing person, so in both case, only “Capacity” matters, either it may be of balloon or of Balloon Blower and question raised like “Up-to Which Extend” it will be possible?
Why you expect so early to judge current rally's time frame? and even if may continue for some more days with gain of some more points, but million dollar's question is what about medium and long term trends? so until this rally get capabilities to reverse, so whether it may continue or not, that is not important issue, but up to which upper level it can extend is concerned matter.
Rasesh,
It looks like the Fibonacci number on the major indices stopped the rally and was the reversal to the downside today. Check out today's video for what I said earlier in the day.
Thanks for contributing your views to the conversation, much appreciated.
Adam
Adam Hewison
President, INO.com
Co-Founder of MarketClub.com