Hello my Investors, Traders and Readers Friends. Yesterday, the market erase all the progress achieved one day earlier. While this behavior is expected in situations of the market downturn, the violence with which these reductions are very disturbing. Probably, the market will continue to seek the next resistance level before going down more. But the bad news from Europe and US are responsible for sinking more and more the stock market.
Lack of leadership from the authorities in the world adding one more uncertainty factor. There is the impression that the authorities did not know they should do in these circumstances... and probably do nothing. That feeling of lack of action, it generates that investors prefer to have their money in cash rather than in the financial market crisis will further exacerbate.
In 2008, the market took a little longer than a month to find their level of resistance before resuming its way down. If this period is repeated on this occasion, we will have many days like yesterday. In these circumstances it is very difficult to find good candidates (long and shorts) that can take a position without assuming a very high risk. (see post: free down trend stocks and free up trend stocks). I think it's more prudent to wait some more days to define a short-term trend.
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