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Will the market skyrocket or dive?

We have had an impressive re-bound these days, but is this rally sustainable? The market is already showing a sign of weakness. Today’s trading is forming a shooting star candle (we are not done yet, so by the end of the session all can be different). The volume is rising and we seem to be exhausted. However, a couple of next days will show.

What’s happening today? Well, the European debt crisis hasn’t been solved and so far we have seen a bunch of promises and hopes out there. I still think that European leaders are preparing Greece for default, so it won’t hurt too much. It will hurt, but not big banks, but tax payers who will pay for it. And thus we are still heading into another decline.

But I am not speaking about decline in this short term, which will be a correction of this rally. Well, the question would be how deep we will go. Since this rally is quite extended it may not be a deep decline. And if the decline will not be that deep, then yes, we may be seeing a trend reversal. But if the European crisis shows up back in its natural and naked version (so not “breaded” in the Sarkozy and Merkel’s crap) we may see a huge drop although technicals are now somewhat positive.

The US growth is nothing extraordinary too, so as earnings kick in, we may see some surprises out there. I wish to be wrong, so let’s wait for the next.

Happy Trading!

2 responses to “Will the market skyrocket or dive?”

  1. Roland says:

    I like your portfolio performance sheet. It shows that you are really a real trading person. Good luck!

  2. Dima says:

    I realize that the markets are never rational but rallying on the same news every day is completely irrational, especially when the news is based on false hopes.

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