The news from the US and around the rest of the globe seems to be getting worse every day. Monday we had the news that there is probably going to be more problems in sovereign debt in The ECU.
Tuesday the markets sold off hard early with the DJIA losing more than 200 points in the first couple of hours. The US thirty year bond reached all time highs again for the second time in a week.
China continues to warn that their economy is not going to continue to advance at the rate it has been growing for the past decade.
The market did manage to trim about half of it’s loses in the final couple of hours as rumors circulated that the Fed is going to be a white Knight again.
After the close of trading Apple Inc. released their earnings and they missed the expected results by more than 10%, not a good way to end the day. To start the day Wednesday Net Flix dropped another bomb and it should have been a very bad day, but it wasn’t.
The markets rallied overnight, and at one point the DJIA was up almost 200 points from its overnight lows.
What is happening to the markets now?
It is called market expectation and it is causing the market to gyrate back and forth between the current resistance and support. There doesn’t seem to be any group that can take hold of the market for more than a couple of hours.
So is the Fed coming in with QEIII going to make the market’s rally?
I only react to the market so I am not going to predict what will happen, but I can predict this, the market is going to give us the opportunity to make profits if the Fed initiates QEIII.
I teach my students how to trade in any market environment. It doesn’t take five hours a day of study; in fact you can accomplish your daily homework in less than twenty minutes.
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Keep those stops tight.
Todd “Bubba” Horwitz
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