Thursday, March 15, 2007

Dow Jones Against All Odds

With Asia and Europe facing sell off, many didn't gave Dow Jones a chance. It once traded at -130 and amazingly close up 50 points. I went to sleep thinking next day my PW will be spectacular. It was indeed a rude shock to see DJ up by 50 points. This goes to show why risk management is important. Despite high chance of Dow Jones plunging, expect the unexpected! Hence no matter how strongly I feel about the direction, i made it a habit to still trade within my money management rules so that when something like this happens, it's just another loss.

Chartered was sold yesterday and I kept Noble. Texas Instrument gave a bleak outlook and I didn't like the risk involved with Tech counters. I added HSI CW at close because I cannot ignore the strong closing of DJ, it formed an amazing "tui" right on 12K support. Under tremendous selling pressure and able to close positive, I anticipate follow through buying tonight and the PPI numbers will be friendly. This HSI CW is only for a quickie and I maintain my STIPW.

The pattern over the last 3 weeks seem to be a big sell off will come after the market moves up. The volume when heading up is always lower than when it's heading down. Hence it's pretty obvious there are signs of jacking higher to "unload". Another observation is how the stocks are doing lower highs on rebound. The only conviction I need now is to see lower lows. This bull run is matured since it is born in mid 2003. It's only a 4 yrs old bull and we still have more room on the upside. It is further noted, no reversal chart formations and bearish divergence is noted as yet. The race is on to identify the leaders of the next leg of the bull cycle!

DISCLAIMER: This is not an inducement to buy or sell. You should do your own analysis on top of my postings. Copyright © 2006 GrowMoney Blog. All rights reserved.