I had a terrible week, and was down over 2% yesterday. The last 3 weeks have been very turbulent - down, up and down. It looks like we are at a critical crossroad where hope and fear intersect. Again, the news coming from the US is just getting worse and worse, yet the market is only ranging right now and not down trending. From a technical point of view there has been a divergence between the news and the market, where the market has been outperforming the news. This is what can catch most people out as they're too tuned in what the media is saying and not looking at the money going in and the money going out of the markets. As we should know talk is cheap and actions speak loud. Just looking at the US DOW and SP500 charts I'm kind of surprised that the volumes during the recent sell offs are weak suggesting investors are over the fear mungering that's been brewing. So we heard that US unemployment is at a very high level this week - yet the market is still coping with it all and investors are still buying. Here's the catch - there are times when the market will completely stun and bamboozle the public by going against the sentiment. Imagine if it surged well past 10,000, 11,000 and even past 12,000? What would the public be saying? And in particular those who have been caught napping thinking that the share market is a dead zone and that only housing goes up? Make no mistake - am I'm neither bullish or bearish - if the market goes against consensus an into the stratosphere then expect the music to get louder from all the experts. These punters believe they know all and the market will only go up when they think it's ready. Problem is when they come around to their senses it will too late! If inflation does hit hard into the economy then various sectors will boom, while others will implode.
So how is everyone going? Where are you at? Are you willing to hold even if the DOW goes below 6500?
