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Rally! Hurrah, all is good again!

Hold your horses. We may have experienced a rally here but it may not mean we are done with selling. It is just a mere volatility entering the market. It is also typical for bear markets to have violent bullish spikes on its way down.

Before you jump on buying (or selling) long investments (or trades respectively) be careful. Even if this market goes up to 2000 or even 2200 it still can crash hard. And I believe, we will. I am not an economist, just a lame guy who tries to make money in this crazy market, but all economic data I can see coming in and analyze them look bearish to me.

And it seems that the market is seeing it too. But first let’s take a small reality check:

 
Bloomberg
(Source: Bloomberg)
 

Let’s take a look at today’s rally:

 
Bloomberg
 

At the first glance the rally looks impressive.

But what sparked this rally? Improved economic data? No, the market mover this time was Mario Draghi announcing that the European interest rates will stay unchanged (and negative).

This will most likely be a short lived rally then.

And what about intraday move? Check this out:

 
Bloomberg
 

Most of the rally actually happened in an overnight trading (futures). The intraday trading was more like a roller coaster.

The conclusion of this rally? Sell on strength…
 
 





2 responses to “Rally! Hurrah, all is good again!”

  1. Dennis says:

    Hello Suckers…

    I’m currently long and looking for a move on the DJIA back to 17,000. I’m basing that primarily on the technical aspects of the daily chart. I know the weekly chart doesn’t look as positive as the daily chart but I’m long, none the less. I’m also finding myself using 3X ETFs from Direxion and ProShares to increase the movements. This may not be the smartest thing I’ve ever done but it is increasing the income flow and helping me to buy additional dividend growing stock. I hope all is well with you.

    Respectfully,

    Dennis McCain

    • Martin says:

      Hi Dennis,
      we may have a rally longer rather than shorter, but I am skeptical as of now and think this rally will end next week. But I may be wrong.

      Of course as a dividend investor I am perfectly OK with further decline and I will be buying more dividend stocks, but as a trader I will be shorting this market next week.

      Good luck and thanks for stopping by.
      Martin

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