5 August 2009
The S & P 500 chart and the Dow Jones Industrials is showing a nice recovery channel (though pessimists would call it an ascending wedge) on the bigger picture charts.This effectively is good news for any one wanting to buy stocks.
Does this mean that it will not drop down again. Definitely not. - A near term correction would be expected and not surprising, however, a total free-fall from this point is quite impossible. So, if you can afford to buy quality and hold, it is really quite hard to go wrong.
- Some might find this a high point to buy right now, and prefer a correction to the base support line.
- Will that correction lead to fear-selling? Who knows?
- Forget the short-term, instead, use this time to search for diversified companies that are cheap and start loading up on them!
Note to Forex
Your Stock Market and Eur/usd has started to decouple in the recent week. This is exactly the concept that we talk about as "seasonal co-relations". Many newbies come knocking on our doors, asking for a quick fix co-relation short-cut. There is no such thing.
You must be able to see the co-relations happen and when it ends!
Alex Wong - Elliot Wave Trading Specialist!
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