Tuesday 15 May 2012

Tortured on the rack

The news yesterday was full of it: GREEK CRISIS HITS STOCKS! But as you can see from the charts a fall was to be expected and, measured by recent market activity, it was not especially big. The lower support line almost held and we are left scratching our heads. Will it go lower or will it not? This morning's futures market says not:: a 40 point rise in the Dow, a FTSE that will open flat and a modest rise in the Dow.

The FTSE looks more like a down trend but even there you can see that yesterday's fall was not out of the ordinary. The fall in the DAX was even less dramatic.

Never trust what you hear on the news. Watch the charts and be afraid unless you get a clear signal. We have now been in limbo for six weeks. That's more than 10% of a year. It's the worst possible type of market for making money. It is impossible to be confident about short positions and holding stocks is mighty risky when there is the threat of a big decline. Woe, woe and thrice woe.

2 comments:

George said...

The markets are manipulated, without a doubt. Ordinary investors were panicked into selling in the days leading to the market bottom in 2009, and scared from buying in afterward by the repeated warning that "the lows must be re-tested". So millions of ordinary people waited for an event that never happened, that never was intended to happen. And now they are being asked to get in again, with enthusiasm, at the top of the market. Never forget that the "market" is, in fact, a cabal. A cabal which has made trillions that the taxpayers are now in debt for.

Andrew said...

Maybe when we look back in 6 months time Facebook's touted IPO will seem the pivot point.