Traders' Corner: What will the Bottom Look Like?
Everyone seems to be asking the same questions these days! Has the market bottomed? Do we need to retest the lows, and if so what happens if we break through them? These are excellent questions to which no one knows the answer. What we can do is look at past bottoms and see if we can obtain a visual picture of what a bottom looks like.
Below is a chart of the 2002-2003 bottom in the S and P. Notice how the market did retest the lows below 80 and then rallied before making a slightly higher low in the beginning of 2003.The market then rallied until 2007.
Notice that we are currently approaching the 2002-2003 lows. If we hold those lows and successfully retest them we could launch into a long sustained rally. If the lows don't hold we could see the S and P with a 5 handle before this mess is over. A lot depends on if the worldwide reflation efforts are successful and how quickly they gain some traction. In either case there will assuredly be a lot more inflation 12-24 months from now!
Have a great week and trade safe!
SmallCapNewsroom.com may have a position in securities which are mentioned on any of the websites or commentaries published by SmallCapNewsroom.com or any of its services and may sell or close such positions at any moment and without warning. Under no circumstances should the information received from SmallCapNewsroom.com represent a recommendation to buy, sell, or hold any security. SmallCapNewsroom.com contains the opinions of its editors and other financial writers and commentators. Neither SmallCapNewsroom.com, Inc. or its employees provide individual investment advice and will not advise you personally concerning the nature, potential, value, or of any particular stock or investment strategy. To the extent that any of the information contained on any SmallCapNewsroom.com publications may be deemed investment advice, such information is impersonal and not tailored to the investment needs of any specific person. Past results of SmallCapNewsroom.com or other financial authors are not necessarily indicative of future performance.
SmallCapNewsroom.com does not represent the accuracy nor does it warranty the accuracy, completeness or timeliness of the statements published on its web sites, its email alerts, podcats, or other media. The information provided should therefore be used as a basis for continued, independent research into a security referenced on SmallCapNewsroom.com so that the reader forms his or her own opinion regarding any investment in a security published on any SmallCapNewsroom.com of media outlets or services. The reader therefore agrees that he or she alone bears complete responsibility for their own investment research and decisions. We are not and do not represent ourselves to be a registered investment adviser or advisory firm or company. You should consult a qualified financial advisor or stock broker before making any investment decision and to help you evaluate any information you may receive from SmallCapNewsroom.com.
Consequently, the reader understands and agrees that by using any of SmallCapNewsroom.com services, either directly or indirectly, SmallCapNewsroom.com, Inc. shall not be liable to anyone for any loss, injury or damage resulting from the use of or information attained from SmallCapNewsroom.com.
