Is It Really Over? Asks Market Timer Frank Kollar
November 30, 2007 (FinancialWire) (By Frank Kollar)
The Nasdaq Composite Index (COMPQ) dropped some 11% in only three weeks. The Nasdaq 100 Index (NDX) comprised of the largest technology companies in the world, managed to complete an 11% decline in only four trading days. The S&P 500 Index (SPX) took longer, about six weeks, to shed 10%, though it seemed much faster while it was happening.
The question is… is that it? Is the bad news that caused investors worldwide to toss away 10-11% of the hard earned gains in share prices, all behind us? Is the sub-prime mortgage crisis history? Are inflationary concerns that have gold at 27 year highs of $800 an ounce, oil futures at close to $100 a barrel, and the Federal Reserve making conciliatory statements to try and calm the markets, all of little concern now?
Though there are bullish indicators such as Wednesday’s breadth explosion with greater than 9 to 1 up/down NYSE volume, not to mention over 300 Dow points added to the plus side. Gold is looking a bit toppy (a possible bearish double top forming?) and bonds are looking at yields below 4% for the 10-year note. Not exactly an inflationary yield by any means.
You just have to wonder though, how can it be over so fast? Can all the very real issues that drove stock prices lower have been solved in only a few weeks? Or are they still lurking out there, ready to bite investors after they turn greedy and lax.
If you have turned bullish, we advise keeping your finger on the sell button. Do not allow losses to accumulate just because everyone knows the correction is over. It may not be.
Kollar’s research has shown that the financial markets are in tradable trends approximately 80 percent of the time. FibTimer strategies define trends and trade them in both advancing and declining markets. Caring nothing about what newscasters say or what the latest economic indicator predicts, trends are where the profits are, and that is where FibTimer is.
Kollar is editor and chief analyst at FibTimer.com (http://www.fibtimer.com) which offers market timing strategies for S&P and Nasdaq index fund traders, as well as bond, gold, small cap, sector, ETF and stock trading strategies.
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