Friday, April 29th, 2016

Market bottom here?


Index options trading, stock market trading, options strategies all have substantial risks at the moment Dow sank another 504 points and NASDAQ went down 108 points in the usual manner as they do these days. We are now in full fledged bear territory. The markets showed no signs of recovery and what ever they gained yesterdays close was wiped out. The charts here show we may have two red candles today they look like piped bottoms or called ” rail road ties” . This is an important chart pattern, and occurs after severe declines or massive run ups. Whatever the case we just have let the market show us if this is indeed a bottom here. Do not want to be fooled again. The markets can keep trending down still some more. Here is the market recap in this chart below.

NDX double bottom on right ?

NDX double bottom on right

Major stocks AAPL, BIDU, GOOG, POT , MOS, FSLR showed harrowing losses once again. These stocks are at their 52 weeks lows and Technically the market is very oversold. McClellan Oscillator is showing a minus 85 reading on my charts.

Fed Chairman Bernanke was also contributing to the markets demise today. “The outlook for economic growth has worsened,” Bernanke told the annual meeting here of the National Association for Business Economics. Many already believe we are in recession now. Bernanke said. “The heightened financial turmoil that we have experienced of late may well lengthen the period of weak economic performance and further increase the risks to growth,” he warned. Now those are things one should ponder…

Those are the words that markets do not like, and hence as those words are being typed here DOW has nosedived dived 504 points with SPX down to 997 for the time since 2003! Whatever gains SPX made since October 2003 -2008 it has given up. Those charts look like the waterfall outside the Great Marriott hotel lobby. Dow is now solidly below 10,000 and SPX below 1000.

There were plenty of opportunities for quick day traders, shorting stocks, selling calls, buying puts. But its the volatility that can whipsaw you hard and create losses of capital. For the moment the best place is your cash money market account earning a safe 3.00 % return. Just make sure its FDIC or SIPC insured ( just in case)…

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