The major stock indexes extended their respective declines from last week's highs. Selling pressure was strong today: There were 2.75 stocks down for every one up on the NYSE and 84.8% of Big Board volume occurred on the downside. But with such an extreme sell-off on Friday, there was little way that today's decline could match Friday's downside intensity, which it did not. We are in a major decline in all markets. History defines this best.
Some of history's biggest market declines occurred after stocks were deeply oversold. Right now, stocks are deeply oversold. We are not interested in trying to forecast a near-term low as this exercise reaps little reward in the currant environment.
It is probable that we are at the end of this wave, with a near term bounce to follow. However to be long or aggressive in this environment would in my view be irresponsible. Hold on to your wallet as the roller-coaster is at the top of the ride. There are a couple of declines and rises before the screamer comes at the top. You will be fine if your seat-belt is on tight.
Eduard Hamamjian
GeaSphere
877-351-4902
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