I am not a financial adviser so you should not take any part of this blog as being financial advice. Observing and interpreting charts is a hobby and so is this blog. The information in this blog is just my opinion, it may not reflect reality. Stock market investing is risky - you can lose all, or potentially more than all of your money given certain market conditions. Not only can you lose a lot of money buying shares, you can also lose a lot of potential profits by selling shares at the wrong time. So please do not buy or sell shares because of information in this blog. Whether you buy or sell shares is your decision as is the decision when to buy and sell. Do not risk any money you cannot afford to lose. Do not risk any money if you do not fully know and understand what you are doing.

Monday, June 21, 2010

Change of direction looking inevitable

The XAO has a look of inevitability about it. Today's close was 4,633. Any intra-day move above 4,680 - that's 47 points away - will turn the XAO Indicator blue. If it does turn blue, there is a 67% chance it will go higher before turning red again. This is based on data going back to 1980.

How much higher? Who knows? In truth no one can know for sure. What we do know is that when the bars are blue it is a good time to be long. When they are red, it is a good time to be in cash or part cash and part shares. Another option when the bars are red is to buy some insurance by way of options but that is something for another day. Here's today's chart.







Click on chart to enlarge
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