That was fast given the steep decline. Just 14 trading days from the low the XAO Indicator is blue agan. It is highly unusual for a market to rise faster than it falls, but that is precisely what we have just witnessed. This could mean the decline was an over reaction - understanable given what had occurred. The real question though is which was the over reaction - the decline or the rally following the decline? One concern I cannot shake is this. The earthquake in Japan occurred after the market closed on March 11. By that time the XAO Indicator was already red and the market had declined over 300 points from the high. It only fell another 160 after the news of the earthquake. So it wasn't the earthquake that triggered the decline. Something else was the cause. Was it Libya? Maybe, but that situation is not resolved, in fact its worse and the market is rising. Is there bad news in the wings? Ordinary folks will be the last to find out. All we can really do is watch the action and make sure we 'go with the flow'. Hopefully the XAO Indicator will help you do that.
No comments:
Post a Comment