Mar 26 2008
Too Many Commentators Are Looking for a Stock Market Bottom
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Maybe I’m just a bit more sensitive to it than others, but it seems like right about now we have a really large number of people calling for a bottom in the stock market. The only place I’m really fully exposed on the long side is in my 401k account, so I really can’t say this worries me, per se. Given that bottoms usually happen rather unexpectedly, I do have some real concerns that we are in for another drop.
The whole sentiment discussion aside, the fact that the charts show a clear pattern of lower highs and lower lows (and I’m looking at closes, not intraday points) tells me that we’re in a downtrend. Until that pattern is broken, I still consider this a bear market and will operate with that bias in mind.
It’s worth saying, however, that while the market overall may not have ended its downtrend, there are area of the market which may have. Some of the homebuilder charts are showing those indications.
Here are some other posts which might interest you:
- EUR/JPY: Might Be a Good Time to Be a Seller
- AUD/USD: Look for Some Action Soon
- Following Up on S&P Open Interest
- Today’s Trading Look-Back - March 26, 2008
- Another Trap for the Small Stock Market Traders
