Discussion in 'Investment Charts' started by Chartman, Oct 16, 2018.
We can follow these in real time now:-
That is a significant bounce since last week and maybe markets have bounced back a little too far? If we see another fall back in the short term that should be the prime time to pick and choose your next long-term technology investments. The technology shares which currently feed on “hot air” but have good potential for the future, are the ones to keep an eye on.
From a point of view of volatility I would prefer to buy the NASDAQ on the bounce. Techy stocks should get hit hardest if the correction continues to trend downwards simply because of the higher ratings and hope value.
It looks to me as though technology stocks will eventually rebound quicker, after probably larger falls, than their more traditional Dow Jones Industrial Average component counterparts. As a consequence, I would look to buy the NASDAQ on a serious sell-off. Risky, but potentially the greater reward.
Have markets bottomed out? Not in my view they havent but they wont fall in a straight line.
Has anyone looked at traded index options? They are readily available in the UK - what about in the US? Maybe that is the way to trade this volatility rather than individual stocks?
There seems to be support for the DJIA at around 24,000 but that is 600 points below where we are now! Is the market in freefall?
I think a couple of more bad days will see the next support levels tested:-
23,500 for DJIA
6,400 for NASDAQ 100
2,550 for S&P 500
If I was looking to sell/reduce my equity holdings in the short term I would sell into the strength we are seeing today.
Which stocks best follow the patterns of each index above?
Might be an interesting way to take advantage of rises and falls via shares with a strong index correlation.
Are we being lulled into a false sense of security? Or was this simply market volatility ahead of the mid-term elections?
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