By John Pisanchik

Happy New Year to all my friends. The year ended with an interesting point to note. It is that the market completed a 5/8’s Fibonacci Retracement off of the March lows. This is significant because a reaction from such a retracement is probable. In other words, the market is susceptible to a retracement downwards at this point. This could retrace back to 900 on the S&P Cash Index. There is a lot of damage that could occur in such a downswing. The thing to watch is the relative strength of the individual stock issues. If the market does turn down, you may want to determine the relative strength of your stock vs the S&P Cash Index. If the stock looks worst than the index, lighten up on it, but if it looks stronger, hold on to it.
I hope you had a great 2009, and I wish you great trading success in 2010. Happy Trading.



Filed under: Market Opinions

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