Online Stock Trading | Is the Bull run over?

Is the Bull run over?


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Stocks rose throughout the morning as Federal Reserve banks continued to pump liquidity into the market with hopes of squashing fears of a massive credit crunch.  Overnight lending rates before the injection Monday were see as high as 60-80bps higher than the Fed Funds rate of 5.25%.  Good ole fashion fear in the overnight lending market, overnight money had essentially dried up.  However, stocks couldn’t keep from sliding back into negative territory.  The major indices opened near their highs of the day only to finish at their lows.  Although not completely signalling a bear market, it is telling us the sentiment is on the down slope.

The NASDAQ and Dow Jones Industrial average have been able to hold their respective 200dma however, the S&P 500 is showing cracks in its armor around its 200dma.  Holding the 200dma or support with volume will show if this bull run is over or not.  I can not predict whether we hold or not but, what I do see are prior winners beginning to setup for nice shorting opportunities.  I believe we are still not close to the moment where shorts should be piled onto just yet.  We are still in the state of limbo, exercising patience and simply not giving in by over trading or trading on our opinion is the right course of action. 

Its our nature to seek out action, especially in the stock market.  We are pre-wired to think that “doing nothing” translates into we get nothing in return.  There is nothing farther than the truth regarding the stock market.  Jesse Livermore surely wouldn’t be trading this market.  Mr. Livermore would go months without trading until conditions were ripe on the bear or bull side for him to make money.  Brad Koteshwar, author of “The Perfect Speculator,” and his mentor “Boyd” would surely be on the sidelines waiting for conditions to be ample for long positions.  The greatest traders of all time would not be playing in this market and neither should we. 

Continue to seek out stocks with great growth in fundamentals that are consolidating nicely.  Be patient our time will come to get 1000%+ gains in individual stocks.  Human nature never changes, the circle of emotion will come around into our wheel house.  We just have to be prepared for the right moment.

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