Sunday, May 29th, 2016

Obama Wins- Markets lower

Today the market is up 200 points before closing time on a bleak and grim unemployment report  ? Maybe the picture of President Elect Obama and Joe Biden sitting together inspired traders? These two look lot better than the other two we had IMHO. What do you think? Leave your comments below…

Last 2 days Market continued to travel South without restrains. The DOW dropped 443 and SPX dropped -47 points in a major sell off that has become the norm. VIX shot up to 63.5 and all major stocks suffered losses.

On Friday’s bleak reports the market rallied 200 points and VIX dropped to 56.   NASDAQ suffered a bruising 73 points and has since formed a large descending triangle. The triangle is outlined with yellow trend lines lines right hand side of the above chart.This type of chart pattern is bearish in nature and usually resolves to the downside. Lets see how this will come in play in next few days. Take a  look at the Nasdaq daily charts. Similar patterns are forming on NDX. Click on chart below…

The DOW is setting up a bear flag on daily charts as well. Its an awful sign if it comes true. That means market is gearing for another downturn near future. We just have to see as it unfolds.

We are still holding on to our cash like squirrels in wintertime. No false sense of relief . None. capital protection is the most sane and prudent thing to do. Just imagine if you are out of ammo when the battle begins what will you do ?

What we are seeing is sharp rallies to the upside and than few days of consolidations and eventually sell off where hungry traders pounce on the meat on the bones in a feeding frenzy. Its the same type of defeatist behavior that repeats over and over again. Markets rally in the morning and in the last hour of the day is a major sell off where everyone cashes in and goes home flat.

There is so little money to go around in trading these days- and in order to fund a lifestyle , they have nothing left, but to cash in quickly and pay the rent.

Photo courtesy AP.


2 Responses to “Obama Wins- Markets lower”
  1. Jennok says:

    Thank’s Great Post !

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