Thursday, October 30, 2008

Enjoy this Bear Market Rally

What do I say this is a bear market rally ?
By looking at the intra day movement of the Dow yesterday (Wednesday, Oct 29)
At 2:30 PM, the Dow was at 8945.
At 3:45 PM, the Dow was at 9320, up 375 points.
At 3:55 PM, the Dow was at 8908, down 412 points in 10 minutes
At 4:00 PM, the Dow closed at 8984.

Is there a method in this madness ? I doubt it. This volatility tells us that the bear market is alive. The end of a bear market is marked by a fall in volatility. Stocks begin to sleep as a base building process begins. This is NOT the case now. While there will always be exceptions, it is wise to follow the most likely scenario (base building).

The rally that we are seeing now, is probably an intermediate up move in a bear market. I call this an intermedaite uptrend since the market is already 20% up from its lows. It is in fact a V shaped rally.

At some point, this up move will face resistance. the two resistance levels are: 2700, and, 3000. You can buy on dips, with the idea of taking profits on any up move. Always keep stop losses.

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6 comments:

haresh said...

Hi Sudarshan,

Appreciate your incredible forecasting and am really a fan of the modesty with which you present it.

Best Regards,

Haresh
haresh.j@rediffmail.com

Nagesh Tiwari said...

Dear Sudarshan
I follow your blog regularly.
I am a learner of TA.
Do you think this is the fifth of the Elliot wave from Jan till now. Its quite clear on weekly nifty charts.
I appreciate your unbiased opinions.
Pl. keep it up.
Regards.

Saif said...

Hello Sir,
I've been following your blogs for quite sometime now.This is an excellent way to help educate new market entrants.
I would request you to post a blog with the significance of all the Moving Averages.Which ones do you track,and where can we find longterm Nifty Charts with the 20,50,100,200 DMAs.
Thanks and regards.
Saif.

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implusive ; people with lack of cofidence can not trade in stock market
pla PASS IT TO MR TAKKAR WHO IS LIKE MR INVISIBLE
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SUNIL
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ribu said...

investor camp -- money minting camp

yu are a part of camp camp means free ; but yu are charging 500-2000 per person why yu do not display on tv; i have written to sebi against it toinvestigate matter
sunil

ribu said...

MR

PLS WAKE UP
DO NOT PLAY TO TUNES OF CNBC AMND ANGEL BROKING
ANGEL BROKING IS A DHABA TRADER
SUNIL
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