Are Last Week’s Market Woes A Sign of Temporary Setback?
Posted by Blain Reinkensmeyer
October 15, 2007 at 12:25 pm
Last week Thursday was a rough day for the stock market as Baidu.com then the economy triggered a sell off. This marked the first heavy distribution day - meaning distribution on above average volume - for the NASDAQ and S & P 500 since back in August of this year.
Most investors have shrugged off last Thursday’s woes as unimportant, which may be correct. A value investor could now be getting temporarily discounted shares on major stocks such as Baidu.com in preparation for the market to continue its most recent trend upwards.
Ever since the Feds cut interest rates on September 18th things have been on a roll. So, if the market this week can hold up and show it truly isn’t affected by last Thursday’s sell off higher prices may very well be around the corner.
But what if prices don’t hold up, and major indices such as the S & P 500 and the NASDAQ sell off? If the market as a whole which is represented by the above indices overall sees more distribution and closes below last Thursday’s lows, a setback could be in place.
Really the only thing that would cause a big stir would be tied to interest rates, and with two meetings left on the year - end of October and December 11th - the market is betting another cut is in store.
I wouldn’t look a this week as possibly the end of the world, more so just something to consider. If we see lower prices again this week the market could be ready for a short term rest of a few weeks to a month before moving forward once again.
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The markets are due for a pullback anyways. I predict that the nasdaq will pull back to around 2730 and continue the uptrend. What are your thoughts?
Yeh markets were due for a pullback, I think it was well needed. If I was a position trader I would definitely wait before putting some new money to work.
Yesterday I charted the trend lines for the weekly Dow prices for the past year and agree we are due for a pullback. Take your pick of the trigger - trend lines, moving averages, lower volume…
http://mytradersjournal.com/stock-options/2007/10/14/down-jones-chart-10-12-2007/
The volume hasn’t been that impressive to the upside of late, which makes me think that the market is more likely to see somewhat of a pullback in the next few weeks.
I called the 2730 pull back!
I wonder will the nasdaq go lower from here.
[...] started this week asking a question, and that question was whether October 11th’s market sell off was a sign of a setback? Well, it [...]