Online Stock Trading | Sub-Prime & Credit Crunches; Volitility index hits highs while major indicies hit new lows.

Sub-Prime & Credit Crunches; Volitility index hits highs while major indicies hit new lows.


Filed Under Market Commentary |

Stocks tried valiantly to stage a sustainable rally at the beginning of today’s session.  However, further concerns regarding the sub-prime mortgage debacle and its wave of terror turned stocks lower by 4pm EST.   Volitility hit a new high, measured by the VIX index from the CBOE.  This signals there is more left to the downside but, beware of the dead cat bounce.

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Volume picked up across the board signalling there was strength to the downside with the move.  Short-term, Sub-Intermediate, and Intermediate trends are all pointing down.  I suspect if we rally off the lows only to cut through prior lows the Primary trend will then point to down.  The question to ask yourself; when odds are not in your favor to grab gains on the long side, why are you going long?  If you have down the same as I and gone mostly into cash then you are enjoying being away from the market.

Are these charts you’d want to be going long?  This kind of market picture should be a huge WARNING not to be going long.

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The Dow Jones Industrial Average will likely break through its 200dma with the rest of the major market indicies. 

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VIX confirming the lows on the indicies:

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The darkside of the market is in control right now, it is not wise to rise up against it.

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Cash is king, shorts on past market winners RIMM, AAPL, GOOG will begin to ripen but patience here must be exercised.  Shorting is a dangerous game, you can get squeezed very easily.  Longs here should not be taken.  I will be waiting in cash for the right opportunity where the odds of big winners are in my favor.

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