Seriously, I had thought that the resulting aftermath of "that big sell-off" would resulted in a huge short-covering as well but what we are seeing now is a series of test on the long term weekly 200day support of the S&P500. The intensity of the drop indicates to me that it is more like a case of panicky selling more thatn anything else.This drop could either be an imminent market meltdown or a HUGE buying opportunity. And I am more inclined to the latter. We should see the market moving higher from here.
My take is that the market goes higher from here. If the market is meant to break this 200 day long term support on the S&P500 weekly chart of 1155pts, it would have bounced right off this level on the daily chart and then hit towards resistance before resuming the drop and eventually breaking the 1155 support. Instead, what we are seeing now is a consolidation of positive reversal candlestick on the daily chart which leads me to believe that the market might have formed a long term bottom here and thus creating a tremendous buying opportunity to load up stocks at this cheap levels.
This is my hypothesis, of course. I will only know on hindsight if I am correct on the markets. Meanwhile, my strategy is to go long at this level with stop loss and to add more if the market goes higher or bounce off any double bottom formation. For more conservative investors, one could buy only upon a successfully retest of the 1155 support. Of course, I am not oblivious toi the fact that the ride up will be choppy due to the huge overhead resistance.
Good luck and have a great week ahead!
My take is that the market goes higher from here. If the market is meant to break this 200 day long term support on the S&P500 weekly chart of 1155pts, it would have bounced right off this level on the daily chart and then hit towards resistance before resuming the drop and eventually breaking the 1155 support. Instead, what we are seeing now is a consolidation of positive reversal candlestick on the daily chart which leads me to believe that the market might have formed a long term bottom here and thus creating a tremendous buying opportunity to load up stocks at this cheap levels.
This is my hypothesis, of course. I will only know on hindsight if I am correct on the markets. Meanwhile, my strategy is to go long at this level with stop loss and to add more if the market goes higher or bounce off any double bottom formation. For more conservative investors, one could buy only upon a successfully retest of the 1155 support. Of course, I am not oblivious toi the fact that the ride up will be choppy due to the huge overhead resistance.
Good luck and have a great week ahead!
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