Market Monitor: Bearish
- Two days of rally attempt petered out on Friday. Even a catalyst like good earnings from Microsoft could not get the market to rally. Sellers hit the tape from word go.
- This is typical of bear market rallies. They tempt you to disappoint. Those who keep playing such rallies at some stage get whipsawed so many times that they lose confidence. Also when you start playing for small moves, it becomes part of you and when the market turns for real and big moves emerge , you are still conditioned by bear market to capture small moves.Besides that your account slowly bleeds. So at least in my scheme of things, sideline is best strategy till we see enough proof of a turn.
- This week will have even more volatility as the Fed decision on interest rate is due on Wednesday.
- Once this bearish trend ends there will be lot of opportunities. In fact it will be very good, if this bearish trend persist for another 6 to 9 months and this correction becomes deeper. After that kind of phase, when markets rally, it is the easiest money you can ever make. However the market may not necessarily follow the ideal script and go down much from this level.