Stock Market Pulse and Sentiment Q1/2009

With the general market down 50% and financials and housing down 80% over the past year and the market indices down at 12-year lows, there is market sentiment that we must be near the bottom.

From a long-term investing perspective, this is a good time to buy in, although the entry into positions should be gradual to account for further price drops. Also, dollar-cost averaging (buying a fixed dollar amount at regular intervals) can be employed.

Notable bear market players are saying a bear-market rally is coming and some are even saying a big rally. So, the sentiment is that the markets are due for a bounce with the open question on how big a bounce. Some have disclosed that they have sold their short positions and are making a play on the long side.

For brokers and advisors who are recommending sell at this time, I tend to think they are wrong. It continues to baffle me why people actually pay brokers and advisors for that kind of recommendation. But we donít know, they could be right and the rally crowd is wrong.

None of this stock market sentiment is to suggest that the recession is over. The underlying economy is still in very bad shape. However, the sentiment of the stock market participants is that the markets have gone low enough (how much lower can it get?) and that it is time to reverse direction.

For short-term traders, it would seem making trades on the long position is the proper move for now and that shorting is on the high-risk side. Follow the technical analysis indicators for the best read on trend reversals to the upside.

Comments are for informational purpose only and do not constitute stock trading recommendations.

More you might like

State of the Economy and the Stock Market Outlook

This article examines the state of the stock markets as economic conditions transpired over the past year and how to deal with the outlook for recovery.

Emotion Dominated Stock Trading

This article examines the domination of emotions over stock trading actions. Even if you know what to do, your inability to suppress emotions will lead to bad trading results.

Hot Technology Stocks (Dec/2010)

Here are two technology stocks that picked up a lot of attention in year 2010 in contrast to one that did not.

IBM Acquisition of Sun Microsystems - Trading JAVA

This article covers the reported IBM acquisition of Sun Microsystems. On the stock trading side, there are some interesting points to discuss.

From Long-Term Investing to Short-Term Trading Ė How to Profit on the Stock Price Rise and Drop

This article presents the notion of migrating from a long-term buy-and-hold investing strategy to a short-term profit-making trading style, capitalizing on the rise and drop of the stock price (following the trend and profiting on the cycles).



Visit igtsoft.com for
your photography needs.

POVRay The Accident



Why has no one figured out how to make money from write-only-memory?