Correction now close at hand
The Dow closed today at 9791 or within 200 points just shy of 10,000 and the point of a correction. The S&P closed at 1068 or within 32 points of a correction as well. Looking at a 3 year chart of both indexes below you can see the Red line resistance level. I have used this chart a number of times in the past 2 months. If we should happen to actually cross over these lines, in my view it will be only temporary. September Options expiration is on Friday so let's see what the action brings tomorrow and Friday. And what if we go over both of these red lines? The expression is irrational exuberance and another expression comes to mind: The bigger they are the harder they fall!. If you haven't taken your profits, it isn't too late. Protect yourself and consider raising some cash. Protecting profits is a good thing.
Labels: Dow correction, SP500 correction
posted by Charles Amico at 2:07 PM
2 Comments:
Charles,
I can't buy your logic that the market is about to crumble and that we are witnessing a state of "irrational exuberance". I can and do buy into a different interpretation based on a more indepth analysis of the same data and graph you presented. See Nadeem Walayat's recent article at Market Oracle:
http://www.marketoracle.co.uk/Article13288.html
Mac
Mac, if you are going to criticize my posts at least quote me correctly. I never used the word "crumble". I do still believe we are in a state of irrational exuberance. I had my sense confirmed yesterday when I met with a Chairman of the Board of a Commercial bank who met with a number of other bankers recently and commented that there is a disconnect between Main St. and Wall St. He said deposits are up in most banks, people saving more and not using their line of credit. He said he was concerned Wall St. was using the same strategies that got the economy into the mess it was in. To him it seemed irrational. And to me it does too. It doesn't mean you can't make money but any move to one side of the equation eventually creates an equal and opposite reaction in the other direction. And Mac, I appreciate you researching information for me to learn differing points of views, but next time try the URL first before sending it. This one doesn't work. Please try it yourself.
Post a Comment
<< Home