Never get too pessimistic!

Yesterday when the DJ30 was down more than 300 points, and NASDAQ down more than 60 points, the market behavior looked very much like panic selling. Usually a major correction or bear market bottoms out when there are a lot of people in panic. According to some market watcher, the Put/Call ratio yesterday reached a multi-year high, which is a reflection of the fear factor and is also typical of a market bottom.

Secondly, if you look at the recent 6-year chart for the S&P500 index, and draw a straight line at the lowest point of the bottoms in the last 5 years, you’ll see that SP500 was sitting on this line yesterday. It bounced off strongly today. So technically speaking, our 5-year bull market remains intact and the correction is very likely over.

Today is the 1st day a new rally attempt started. If we can get another big up day on any date after next Wednesday day, this rally will be technically confirmed. After that, most bears will retreat to their caves, and the bulls will rule the market again. I plan to use my margin aggressively once the rally is confirmed.

However, history serves as guidance only. Past performance doesn’t guarantee future returns. Please exercise some caution. Time will tell.

所有跟帖： 

• problems are not solved and they will hunt back again -pediatrician2- ♂ (234 bytes) () 08/17/2007 postreply 14:06:47

• Nobody is saying that all the problems can be fixed -凌空长老- ♂ (198 bytes) () 08/17/2007 postreply 14:13:45

• CFC may survive but smaller lenders must consolidate -77ll8- ♂ (0 bytes) () 08/17/2007 postreply 14:45:18

• too pessimistic about what? -IvyLi- ♂ (62 bytes) () 08/17/2007 postreply 14:10:37

• 1) Yesterday was an up day for SP500, next Tuesday -BeLe- ♀ (196 bytes) () 08/17/2007 postreply 18:58:58