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
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