Holiday Traders Get Stomped Says Market Timer Frank Kollar
December 28, 2007 (FinancialWire) (By Frank Kollar)
The stock market, having advanced at an unsustainable holiday pace the past week, got a dose of reality today when news of former Pakistani Prime Minister Bhutto’s assassination took the Dow down triple digits.
But almost any measurement, the stock market was primed for a fall. This news event was just the catalyst that started it. The Nasdaq Composite Index (COMPX) was sitting on two huge gap higher days, both on low holiday volume. The CBOE Volatility Index (VIX) is well below levels where a decline should have begun. All that was holding it up is the lack of traders who are mostly on vacation this week.
The S&P 500 Index (SPX), also sitting on a gap higher day on Monday of this week, is back below both its 50-day and 200-day moving averages, and while we are at it, those averages have now crossed each other. Bearish.
While there is still some holiday trading left, we would be very careful at the open on January 2nd.
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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