Market ready to turn?

  1. 6,975 Posts.
    G'day folks,

    I've been pondering the direction of the market which has not been kind to bulls in the past few weeks & although I missed a chance to short TLS last Thursday I'm quite glad I did't because picking the profit point would have been tough cos it really hasn't followed the market.

    ASX - the XAO looks like it will prove to be a tough little b. and having made a hammer reversal candle looks like making another today. This may prove to be the bottom area but it may only be the base for a rally only to decline further later...but a rally looks on the cards so I think longs are the order of the day at the moment.

    DOW - there have been some good posts today on the support level of the DOW with some consensus suggesting 7500 (ish) is the point. The index does not necessarily have to go to that level and with a broadening wedge pattern it is likely we will see a rally commence some day soon. Will that mean we are around the bottom you ask - too soon to say. However, oil prices are coming off the boil which will put more money in cunsumers pockets, drop the costs of business (operating as well ar raw material) thus puting a lid on inflation fears and keeping interest rates low.

    The worry in the US, apart from the corporate governance issues, is that the country is now running a budget deficit as well as a negative trade balance which is not healthy at all and needs redressing. Forget the Sadam nonsense, I suspect all the rhetoric is directed at sparking some kind of coupe in Iraq and Iraq being a non fundamentalist country poses less threat to the world than some others - be they Islamic, Christian or whatevever.

    Tread carefully fellow travellers.

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