Market Support Holds Says Market Timer Frank Kollar
February 8, 2008 (FinancialWire) (By Frank Kollar)
Was it only a week ago that we wrote the bottom was likely in, at least in the short term, for the current stock market declines? In this past week the S&P 500 Index – SPX has shed an additional 4% and put fear into the hearts of many traders as the prior January 22 lows are again approached.
Thursday was critical as the Fib 61.8% SPX support level for the two-week rally off the lows, critical support for many traders, was hit in early morning hours. That critical support, at SPX 1318.36, held and the SPX closed, finally, with a gain for the day.
The Nasdaq 100 Index – NDX actually tested the January lows in intra-day trading and closed with a gain. The day was not a powerhouse one, but still, the direction was up instead of down.
The bounce off support may be the start of an advance, though current market volatility is so intense that traders need to be very nimble to stay ahead of whipsaw losses. Changes in market direction make taking a position in any direction hazardous.
But with the huge rally off SPX 1280 back in January, and Thursday’s successful test of short term SPX support and the NDX test of major support, we think the odds now favor the upside.
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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