Thursday, November 16th, 2017

Market bottom?


Dow fell 800 points in a traumatic session, recovering towards the close in a spectacular rally fueled by some short covering and bargain hunters. NASDAQ and NDX both were down 156 and 120 before recovering half the losses. I think the losses were so huge that market couldn’t recover entirely and it time out. It may continue its upward motions in early sessions maybe.

There was anxiety and panic. VIX ( fear gage) was at 56 at one point and finished at 52 meaning fear and panic has not subsided and the volatility not gone away. Its a difficult market to trade, whipsaws, cut backs and can result in significant loss of capital. Nevertheless day traders were swinging from the vines like chimpanzees at the zoo! Scalping, hording, punching these wild gyrations into piles of cash and smaller gains. This is not our style of trading, taking risks and weeping away later.

Making money in the markets is a hard game and careful planning can keep you in the game a long time, when things get this bad its best to be on the side lines and wait it out. Yes you will not get monthly income, but your will not lose your shirt either.

Ndx daily chart with long tailed candle

Ndx daily chart with long tailed candle

Please click above chart to see larger picture .After looking at daily charts, I figured that this chart of NDX could have placed a bottom here and they were some capitulation signs. There is a red long tailed candle on the extreme right. All the charts on NDX, SPX, DOW, SPY are showing a long tailed candlestick which often accompanies a market bottom. But its too early to tell, and this market has fooled us 2 times in recent weeks where such tails have appeared and the markets slided again. I am not going to say for sure, just watch the action , keep the powder dry, and make money by not trading ( I mean by not losing).

Comments

2 Responses to “Market bottom?”
  1. Nick Beardshaw says:

    The market commentary is very good, I love you style. Now it may be that we can bounce from here

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