50 Day EMA crossed above 200-day EMA in Aug 2009. It broke below that in July 2010 and now in September 2010, it is finally above the 200 day EMA. It is clear that crash is out of consideration for now. The market seems to be looking for direction and is going to flip-flop between the support and resistance depending on the news/momentum. It is critical to be aware of the short-term news and the long(er) term implications if you are a buy and hold investor. If you are a trader, then the implications you have to worry about are going to be short term as well. Earnings reporting starts next week. Data came in positive so be aware that there is more fire for bulls than for bears unless the earnings tell another story. Nevertheless, there are many signs that the markets are kinda overbought. So beware - a correction is a real possibility but a market crash or bear market is unlikely for now.
Thursday, September 30, 2010
Possible Correction? Sure... Bear/Crash? - Unlikely!
50 Day EMA crossed above 200-day EMA in Aug 2009. It broke below that in July 2010 and now in September 2010, it is finally above the 200 day EMA. It is clear that crash is out of consideration for now. The market seems to be looking for direction and is going to flip-flop between the support and resistance depending on the news/momentum. It is critical to be aware of the short-term news and the long(er) term implications if you are a buy and hold investor. If you are a trader, then the implications you have to worry about are going to be short term as well. Earnings reporting starts next week. Data came in positive so be aware that there is more fire for bulls than for bears unless the earnings tell another story. Nevertheless, there are many signs that the markets are kinda overbought. So beware - a correction is a real possibility but a market crash or bear market is unlikely for now.
