Is The Selling Over? Asks Market Timer Frank Kollar
December 21, 2007 (FinancialWire) (By Frank Kollar)
Only one week ago, Fed Chairman Bernanke pulling the plug on a nice rally in the making. Since then it has been downhill for stocks.
The selling hit a bottom on Monday of this week and over the past two days the markets have struggled higher. In fact both the S&P 500 Index – SPX as well as the Nasdaq Composite Index – COMPQ stopped falling right at seemingly strong support levels on Monday.
So, all is ready for a rally? Maybe, but then maybe not.
The SPX remains below its 200 day moving average, a bearish indicator, and the 50 day moving average for the SPX is about to cross below the 200 day average. A very ominous sign for future months.
Volume has been okay, but not great over the past two trading days and more worrisome is the CBOE Volatility Index, a measure of fear used to determine potential tops and bottoms by many analysts. It has not bottomed nor is it near levels that would indicate a bottom is in place.
Traders who just must take bullish positions should stay very cautious and keep their finger on the sell button.
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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