What a bull run! Singapore Stock Market together with the rest of the global indices are breaking record highs after the late February 2007 scare by Shanghai bourse where they fell more than 10% on that fateful day. The same night, Dow Jones reacted negatively at open but it was a late technical glitch on their system that lead to a massive selling that rocked the markets across the globe in the following weeks. A lot of money was lost by this sudden debacle as investors sold into panic. Those who held on to their shares emerge as victors as we saw the market rebounds to great heights. However, was it blind faith or powerful hoping skills that they emerge as winner? Market exuberance is notoriously known to puncture any bull run in spectacular fashions. We are already in the 4th year of the bull market which started in mid 2003. Along the way, we read and heard warnings about market exuberance and how the bull run would soon end. However, this bull market’s resiliency caught many bear advocates by surprise as we went on to break new high after new high. The truth is, no bull run will go on forever. These bear advocates will be finally right one day after many wrong calls. However, rather than playing this guessing game or arguing our lungs out with different opinionated fellow investors, we can be well informed to protect our investments. Knowing a simple indicator known as Money Flow Index will keep us well informed. The objective of this article will seek to arm the reader with a time tested method in identifying the reversal of an uptrend thus protecting their investments.
This article first appeared in Smart Investor in 2007. DISCLAIMER: The contents in this website are for fun reading and must not be taken as a buy or sell advice. You must do your own analysis on top of my postings. By reading this blog, you agreed that i am not responsible for your trading.