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osprey

12/30/08 7:47 PM

#607991 RE: osprey #607990

Dow TA. I just eyeballed the Dow chart. We could be forming a bottom. The formation is either a bear flag, meaning a break down, or a bottom forming. It is a bit long for a flag or pennant.

To my mind, we should have another leg down. We have passed almost all the stages of a bear cycle, now in Irrational Pessimism. We have not really entered Abject Despair where market participants leave stocks for good and no one really cares much or believes the market will ever rally.

That and a $1.50 will get you a cup of coffee at Starbucks.

More realistically, no one knows where the bottom is yet. "Information evolves slowly in bear markets, Hussman." We simply don't have enough info. Probably no more banks will fail. The feds have gotten proficient at bailing them out with imaginary money.

Support is at 8,000, resistance 9,000. A tell would be a convincing close breaking support or resistance.

Having been out of the markets mostly for a while and in cash, it could be time to scale back in. I don't believe that there is any hurry. With this broken market and horrendous economy, any rallies tend to be tentative and short. If the Dow gets back to 14,000, this could take a year or even much longer.
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zab

12/30/08 8:24 PM

#607992 RE: osprey #607990

Holding stocks through earnings is still a crap shoot even in a good economy, would not want to even think about how other companies will report. Since business is bad all over, I would think that any run up in a stock price prior to an earnings release should be sold, period. I got burnt once too often on earnings, even when sales and earnings were good, they were never good enough, and the stock sold off.

zab