Online Stock Trades - Have the Markets Bottomed?
DOW Charts and Stock Market Trading
It is generally accepted that the stockmarkets will bottom out before the economy does and that the stockmarket is in fact a forward indicator, such that the stockmarket will start to recover between 6 and 9 months before the recession ends. Stockmarket investors would be well-advised therefore to be ready with their cash if they consider that the mrkets are about to turn.One chartist that I follow as he seems to get his technical analysis of the DOW, NASDAQ, S&P etc... right more often than he gest them wrong is Oscar Carboni. He posts his videos on youtube under youtube.com/ futures analysts. His style is that of day trading however and he closes all his positions at the end of the day so as not to hold any equity positions overnight.
He believes that we may get a couple of days of upward market movement so it may be reasonable to buy stocks for a quick day trade, but at the moment he is still bearish overall and thinks the markets will be heading down again soon, so day traders need to take care not to be caught out and keep a close eye on share prices in real-time.
Andre Gratian is another chartist - over at the marketoracle.co.uk - he believes we may see a good stock market rally but he too is stil bearish for the long-tern as he says the bear market may continue until 2012 - 2014 ! - his most recent summary is that
"there is evidence that the stock market indices have tested their November 2008 lows successfully, with the exception of the Banking and Financial indices. All of them show plenty of positive divergence at their second lows, which were reached at the beginning of last week, and they have since rallied, totally ignoring Friday's worst unemployment report in recent history.
This has all the markings of the beginning of a good stock market rally, but it will have to prove itself over the next few days by overcoming the January top, and keeping on going with good breadth and volume support."
This has all the markings of the beginning of a good stock market rally, but it will have to prove itself over the next few days by overcoming the January top, and keeping on going with good breadth and volume support."
Charting is useful in online stock trading as stock charts reflect in real-time and historically the combined effects of the emotions and decisions of all the stock trading carried out by all those involved, but as the main stockmarket traders use charts the charts themselves often become self-fulfilling, if all the market traders and day traders are looking for the same buy and sell signals.
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