Midweek Market Update
21/Aug/2007 07:30 PM Filed in: Finance
*** WARNING: This is not trading advice, so please
don't use it for your trading decisions. Any actions
you take based on the opinion below are solely at
your own risk.
What a wild ride! The second trade setup (see August 5 Market Update) started to play out with a short at 13,250, but the Dow spun on its heels around the 12,500 level and forced a closure of the trade today at 13,100. Since the swift market gyrations could be signaling a potential change in the trend, we need to be careful with long entries. To do so, look for rallies (or declines) accompanied by solid volume. So far, declines have demonstrated this correlation since early July, whereas rallies have been supported by anemic volumes.
What a wild ride! The second trade setup (see August 5 Market Update) started to play out with a short at 13,250, but the Dow spun on its heels around the 12,500 level and forced a closure of the trade today at 13,100. Since the swift market gyrations could be signaling a potential change in the trend, we need to be careful with long entries. To do so, look for rallies (or declines) accompanied by solid volume. So far, declines have demonstrated this correlation since early July, whereas rallies have been supported by anemic volumes.
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