Monday, August 23, 2010
Weak Market
The bounces have been sold but we are getting to the point where a short term bounce should stick. The intermediate term trend is down, so bounces should only last a couple of days. I would not be a bold buyer until we get to mid-late September. The current economic environment is not conducive to big rallies unless we get extremely oversold. We are not there yet from an intermediate term perspective. The economic data this week should be bad, but I think we'll likely bounce on the numbers after kneejerk selling because it is too well known and forecast.
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3 comments:
The S&P 500's PE Ratio is higher than I thought. It's currently at 19.6. http://www.multpl.com/
What made you expect that we were going to have weakness into the close today?
Was it because we had a strong but brief open, and then quickly retreated and traded lower thereafter? So looking at a candlestick, you saw what I believe is called an inside day?
Is this a pattern you're used to seeing in the past and just went off that recognition?
I might go back into day trading again, and would have to either short pumps after a multi day rise which don't have much correlation to the market, or play the 100 dollar stocks a couple hundred shares at a clip when nothing else is happening, which closely follow the overall market.
No one wanted to be long ahead of the existing home sales number so they had to sell before the close.
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