With all of the major averages down 2% or more today, it is classified as a True Selling Day, the first such trading day since early July. I also do not like the gap down through support in the Nasdaq.
The cause of today's concern was overnight trading in the China market, which was down sharply. If the Chinese economy slows, then one of the main leaders of the economic recovery will no longer be providing demand for U.S. products, and so much for U.S. economic recovery.
As a result of today's trading, it would be a good idea to take some money off of the table. This has been a big run up in the market since the March lows, and we are entering a seasonably weak period for the market. If there is another true selling day before a big buying day occurs, shorter term traders should pile into cash.
Scott Cole
www.theultimatestocktradingsystem.com
Monday, August 17, 2009
Sunday, August 16, 2009
Stock Market Commentary
U.S. Stocks closed out the week with losses on Friday, and the market's 4 week winning streak was snapped. However, the overall pattern is quite solid and still points to higher prices ahead. The market is forming a small continuation pattern, and will head higher once it is broken to the upside.
Ultimately, though, the market is due for a correction. In a couple weeks we will also be heading into a seasonally weak period of the year, September and October. During that period, we will be getting an idea of what kind of legislation will be coming out of Washington in regard to health care and energy. If Congress passes legislation that is much more watered down, the market should react favorably. If, however, the Democrats push through a bill by the use of reconciliation, the market will definitely react negatively, as a sizable health care bill and cap and trade will be viewed as drags on the economy.
Stay Tuned!
Scott Cole
www.theultimatestocktradingsystem.com
Ultimately, though, the market is due for a correction. In a couple weeks we will also be heading into a seasonally weak period of the year, September and October. During that period, we will be getting an idea of what kind of legislation will be coming out of Washington in regard to health care and energy. If Congress passes legislation that is much more watered down, the market should react favorably. If, however, the Democrats push through a bill by the use of reconciliation, the market will definitely react negatively, as a sizable health care bill and cap and trade will be viewed as drags on the economy.
Stay Tuned!
Scott Cole
www.theultimatestocktradingsystem.com
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