First chart is the S&P500 daily chart. The short term trend is up, but the index is right at the bottom of the trend. Is the S&P going to rebound as it is oversold? Or, is it going to break the trend line and start a new leg downward trend? Market is at the blink.
Second chart is the S&P500 weekly chart. The intermediate term trend is up, but again, the index is at the bottom of the range. The market is telling the same thing: it is over sold, but we are very nervous.
Finally, the monthly chart. This is a long term picture of the S&P500. We are now sitting at the low of the post 911 bottom. The market is wondering: the bubble is burst, and all the values created since the post 911 low have been wiped out, but, is that all? Or, the damage is so severe that, wiping out all the value simply is not enough, and there will be more damage to come?
This is the time of crisis as well as opportunity. The mission now for the stock traders is to preserve CAPITAL. However, preserving CAPITAL is only half of the task. The other half is to invest the CAPITAL in the right places when the bottom finally arrives.
In 1929 when the great depression started, Kennedy's fortune was estimated to be $4 million. By 1935, his wealth had increased to $180 million. According to Time Magazine, Kennedy survived the crash “because he possessed a passion for facts, a complete lack of sentiment and a marvelous sense of timing.”
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