Monday, October 6, 2008
Possibility for rebound, however downtrend still strongly intact
Bollinger band starts to winden..meaning that i suspect there is going to be large volatility soon, most probably a rebound, because it has been long overdue. (However don't bet on this as i expect the downtrend to resume)
However, other singals are still bad. Indicating more downside to come.
MACD- crossing down over the signal
Parabolic Sar- the green part just cut the graph
MA 7/5 - The 5 day moving average is under the 7 day moving average
Only consolation is that its reaching the lower end of the bollinger band, hence the possibility of a bonce to the average of the band
In general, based on past market.. usually a bear market will last at least 1.5years, and the index will drop to around 37% of the max value.. As of now, we are only 1 year through ( starting from sep 07) and dropped only till 60% of the index value, hence there is room for more downside.
I estimate may09 to be a safer entry point in general. Even if the market were to keep falling, downside is limited.