Sep 18 - Update to our yesterday’s posting.

I guess I nailed this one. I called the short term bottom yesterday. It turned out to be true. Both Longs and Shorts battled out today in this historic trading day, which only made the investors on the sidelines even more nervous. In the final hours of the day, market breadth turned extremely positive pushing all major indices 4-5% greener and higher. Volatility Index, VIX surpassed 42 to end at 34. Usually a spike in VIX followed by a reversal means a short term bottom is in. It will be interesting to see if market actions today will initiate a short term bear market rally.
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Sep 17 - Wall Street plunged again in a crisis of confidence Wednesday as anxieties about the financial system still ran high after the government’s bailout of insurer American International Group Inc. The Dow Jones industrial average dropped about 450 points, and investors seeking the safety of hard assets and government debt sent gold, oil and short-term Treasurys soaring…. » read more

I can’t believe I am saying this, but is this a near bottom? VIX touched Jan, mid March lows again.

Posted: 09|18|08 at 5:04 pm. Filed under: Financial Markets, Trading Strategy, Finance. Comment | Trackback