I've been really suprised that so many people are ready to start flinging money into this market for anything more than a quick flip. Jim Cramer has been telling people to bid since the first drop. He has continued to push stocks since then.
I've read other "guru's" who have been saying this is just a blip and should be bought right here.
My response: WRONG
Yes, the market is getting oversold in the short term. One would expect that after such a big move. But one week is not going to solve the markets problems. There has been a lot of damage done and technical indicators right now are pretty ugly. A break of the 50 sma, shorter term moving average crossovers and just plain weak action (the close on Friday for example) all are not a signal to buy right here unless it is an intraday or short play.
By looking at the Dow chart you can see that the average is topping out each day on it's 3 day ema. MACD and stochastics do not look good at all. Selling volume has been heavy.
My point is that building a bottom isn't happening right now. It took a while to happen last May and it will continue to take a while this time around. So don't be too eager to put down the cash right here right now and buy. Wait for some confirmation and right now it just hasn't happened yet.
The Nikkei is down 375 points currently at 12 pm Japanese time. Other Asian markets are down as well which does not bode well for the US markets tomorrow. Noting this and the ugly close on Friday I do not expect much on Monday. However, volatility does go both ways which can make intraday action interesting.
I'll pretty busy right now but hopefully I'll be back posting again tomorrow.
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2 comments:
Clay, i've been hearing the same thing. Cramer's an idiot, he tells everyone everyday to do the equivalent of an all in move in poker. What other guys are calling bottom?
Too many! There was a tremendous swing from bearish (after the drop) to bullish (now). It's suprising that such events can be forgotten. Now Cramer is on MM pushing oils, yet he hasn't looked at a chart has he. The action in oil was ugly today.
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