What Rally? Asks Market Timer Frank Kollar
January 30, 2009 (FinancialWire) (By Frank Kollar)
The S&P 500 Index (SPX) lost over 3% and the Nasdaq Composite (COMPQ) followed suite as stocks plummeted on Thursday, January 29.
This came only the day after an almost 3% rally in the stock market. That rally pushed both indexes above their 50-day moving averages and there were several calls for a new bullish breakout from market advisories.
But Thursday’s selloff came as both indexes reached their 50% retracement resistance levels, and both indexes are now back below their respective moving averages.
This reversal from short term resistance does not bode well for coming days. Typically a close above the 50-day moving average would have been followed by rising prices on rising volume. Instead we had declining prices on rising volume.
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.
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.
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