10 June 2006
Market technical rebound not far away
Note that many stocks have completed a standard 5 down waves, the market may be ready to enter bottom building phase in next 1 to several weeks to form a bottom formation before general rebounding.
Some leaders have completed bottom construction and have broken above the necklines of their bottom formations.
Seems market technical rebound is not far away. But remember this may just be a technical rebound or a sucker rally. The bear may have come into the market hinting by 5 down waves appearing on many stock charts. For the time being, it may be appropriate to take this rebound as a technical rebound or sucker rally or wave B retracing the sharp fall from highest point to current low. Most stocks will rebound about 50% of total price drop calculating from lowest point to highest point. This rebound will provide an excellent opportunity to exit the long positions with some profit or at least with much lower losses for majority traders.
After rebounding, we may use another strategy to make money even faster in the bear market - borrowing stocks and shorting, pending confirmation by market trends. We need a general market downtrend to execute this strategy, just like that we need a general market uptrend to execute long strategy.
Note that many stocks have completed a standard 5 down waves, the market may be ready to enter bottom building phase in next 1 to several weeks to form a bottom formation before general rebounding.
Some leaders have completed bottom construction and have broken above the necklines of their bottom formations.
Seems market technical rebound is not far away. But remember this may just be a technical rebound or a sucker rally. The bear may have come into the market hinting by 5 down waves appearing on many stock charts. For the time being, it may be appropriate to take this rebound as a technical rebound or sucker rally or wave B retracing the sharp fall from highest point to current low. Most stocks will rebound about 50% of total price drop calculating from lowest point to highest point. This rebound will provide an excellent opportunity to exit the long positions with some profit or at least with much lower losses for majority traders.
After rebounding, we may use another strategy to make money even faster in the bear market - borrowing stocks and shorting, pending confirmation by market trends. We need a general market downtrend to execute this strategy, just like that we need a general market uptrend to execute long strategy.
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My understanding of stock borrowing for short is quite a burden ( from my friends ). There are a lot of cost involve and its a little tough to earn this back. further more, we need to give back the stock when the lender wants it back. Is that true?
Yes. I think this is not a perfect idea. I just get some clues from Gav's blog that we can day trade stock index futures to make money in the bear market. I'll apply an account in Man Financial and do day trading for Mini Dow, E-Mini S&P 500 and E-mini Nasadaq 100 at night time from 6pm to 11pm, Mon to Fri. You may see my trading process then.
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