Monday, August 20, 2007

ARE STOCKS READY FOR AN UPTICK?

Most of us know what has happened to the stock markets over the last few weeks. The DJIA gave up nearly a 1,000 points. Other indices have followed in this wake. Financial stocks and retail stocks have been hit especially hard.

REVERSAL AROUND THE CORNER?

The Author does not predict stock market moves. He merely follows them, buying on the way up, selling on the way down. Never holding losers and protecting gains.

However, two of the short-term indicators that the Author follows have reversed up. These reversals do not augur a general reversal, however, as they usually uptick occasionally in a broad market decline. Still, this might be a time protect your gains in short positions and be prepared if the market reverses.

WHAT WOULD THE MARKET REVERSE INTO?

One caveat to consider, however, is that the markets would be reversing into the months of September and October, historically some of the worst months for the stock market. But a reversal and a general uptrend through these months would be worth playing, perhaps indicating medium-term strength that through December and January.

SOMETIMES EVEN THE DOGS OF AUGUST HAVE THEIR DAY IN THE DESERT OF THE REAL!