Wednesday, February 4, 2009

DJI Trying to Rise

It looks like the Dow is trying to rise above a well-formed base as shown by the support line of 7887. The first test of resistance will occur at around 8387. If that boundary is broken, we can look for the next level of resistance of 9043 at which point the first level of resistance becomes the next level of support until it can consistently stay above 9000. I am waiting for the day we see a consistence rise in equity price when the level of 9000 becomes a rock-solid base of resistance.

When that happens we will see the strength we have been looking for to signal the end of what many people have referred to as the "absolute" bottom. I've actually seen many bottoms formed during this whole retraction of the market, but I expect we have really seen the worst of it. I still believe this is an excellent time to establish new wealth in what I firmly believe will be the biggest bull market in a decade, provided we can actually clear the bottom far enough to keep its memory from interfering with our judgment. And how does that memory affect us? It instills fear.

That's as plain as I can put it. We need multiple strings of victories on the way up so that the memory of all this stays behind us, but not so far behind us that we ever forget how we got here: greed. That' put plainly also. We need a new order of trader to emerge from all of this; An honest trader that compels the rest of us to excel. Hopefully each of us can be that trader.




Have a good one,
Roger

2 comments:

  1. Roger, What will you buy if this indeed becomes the best bull market in a decade?

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  2. @Anon
    Well, that's a good question. I've often pondered that myself. There are some gaming stocks that have been absolutely hammered that might prove very lucrative for a long position in a bull market, and I am currently analyzing an entry point for them.

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