January 2008 Going Down The Pits - Worst Stock Market Decline In 6 Months
by Das Brain
The last stock market drop was back mid July 2007 to about mid August 2007 with a decline of roughly 10%. That is one month a drop of 10%, however this current downturn in the market is a bit more severe. From the beginning of November 2007 until now January 17, 2008 the indexes has fallen almost 20%.
That is quite a large drop, some individual stocks has lost more than 30% of their value and looking at the charts, I don’t think it is over yet. There might be further downside, followed by some sideways movement before the trend changes.
For me, I am holding some QQQQ options, that was bought a few weeks ago, the market has declined further since then, but they expire in December 08, so I should be alright. However, I do know a lot of traders out there are hurting right now. One of my online chat trading mentors has taken a small hit for January, there are a lot of people who have lost so far this month.
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It is not a good time to be long right now, I am going to wait until the MACD converges, and the parabolic SAR indicator to confirm trend change before I step in. It is downright scary right now, but I am watching the charts and scoping out some bargains, so when it is time to get back in I know exactly which companies to buy.
Today the Dow Jones finished down 300 points. Another big drop.
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