subject: Stock Trading Techniques Pt1 [print this page] Daily Stock Report for Tuesday Morning, February 9, 2010 pt1
Stocks initially moved up on Monday and went into the positive on all indices in the first 2 hours and spend the rest of the day selling off with losses of 0.7% in the Nasdaq Composite to as high as 1.0% loss in the Dow30.
The trading action is clearly negative with todays selling not attributed to any specific news except from the latest lingering debt concerns of European countries Greece, Portugal, Spain and Ireland. (Forgot about Iceland).
Todays trading action supports the idea that we are probably starting a longer term downtrend more than just what has been a typical pullback within the uptrend we have been in since March 10th last year.
What is very common in a selling type of environment is selling causes more selling which usually ends in a panicky type climactic fashion with high volume and often with one more piece of bad news that scares the last suckers out of their long positions.
This exhaustion in selling is the ideal place to build long positions but few people can recognize or have the courage to buy when it feels like the sky is falling (you should learn, the great investors and traders understand this). If this scenario is what we are starting, at least on some scale, it appears as though we are far from that climactic point.
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