daytrade diaries....friday, page-47

Theresa,

XAO- When we broke through the long term trend line, I predicted that we could go as low as 2600 to 2200- reason? because at the long term trend level we were back to realistic forward PE's based on past economic conditions. On future PE's based on significantly reduced economic activity we should expect a further drop- I used approx 30%, however this is starting to look conservative with all the bad news now starting to creep out. I also expect the market to overshoot and reach much lower than it should based on market panic. I hope I am wrong but......time will tell. On the bright side- this should increase volatility and provide some yummy trading opportunities. I have had a couple of good near 1 baggers from holding shares for a couple of hours.