Well it could be that the Labor Day has come and that’s when most of the Wall Street Movers and Shakers come back from holidays, the other reason that for the past couple of moths the stock market has been consolidating. You might have noticed how you’ve been in and out of the market and seeming not to be making much money.

The other day in the blog I wrote about a Dead Cat Bounce; perhaps that was just an indication that the market is finally going to trend, but which way. If we knew that we could all make millions very quickly.

I’ve also talked about tuning into what people are thinking and are likely to do. Well the last three days are making me think that perhaps the thinking is “hey we are a bit tired of this going nowhere it’s time make some money” sort of thing. One of my pet indicators is turnover and we’ve seen a good bit of that this past week. So I think the signs are bullish but I’m not jumping in and buying just yet. Rather I’ll look forward to making some money on the stock I bought while the market was down. You do the same don’t you, ‘only buy when the market is down’ I hope so.

This is also a time to be very careful on how you interpret the signs, for we should not forget that a lot of people are now using ‘Trading Programs’ to try and make profit on a daily basis and I feel it has an influence in the market. If your watching closely you can see these extreme overbought and over sold indicators. So it is a matter of learning to see the actions of people to confirm the trend not try to anticipate it. It could also be a time to forget a lot of the old rules of trading the market.

These of course are my thoughts on the matter and are in no way an indication of what you should do. As I always preach, do your own research and get advice from your professional adviser if you like.

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P.S Watch this very interesting video “Is this you”

A Dead Cat Bounce I mean
Its 11.30pm I just finished watching to footy, cant help but think that investing on the stock market is a bit like a game of footy. One minute the crowd is cheering like made, then subdued, then the opposing teams fans pick up the cheer as the game ebbs and flows. Just like the Bears and the Bulls.
The market in Austalia went up today after a very hesitant start, even though the Dow was down. Now I don’t claim to be an expert or a seer or fortune teller or anything like that, but it looks like a decision is close to being made re the election, and I feel that could be the reason why the market trended up, but just in case I’ll be ready to take profit as soon as it appears, just in case I’ve got this wrong.

MR Ed
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Funny title, not so funny if you get caught. The dead cat bounce is a term used in the stock trading world to explain a sudden upswing in the market, that seemingly comes for no real purpose. If you are not on your toes it can cost you big time, and we have all newbie traders will eventually get caught by one, yours truly included. I will never forget my first experience and can claim a little bit of my self respect back because it was early in my career and I was still ignorant.

Be honest we have all rushed in when we thought the market was turning bullish and it looked like easy pickings. Only to come up short a day or two later when the market plunged. My gut tells me that today’s upswing in the market is just that a dreaded “Dead Cat Bounce”. It usually refers to a particular stock, but it can also apply to the whole market.

Well the Aussies haven’t sorted yet who will govern the country. As I said in my previous post my latest investment depends on who gains power; Labour or Liberal. I backed the liberals only because I felt that the peoples sympathies lay in that direction and would make the difference in this play. So you see when it comes to investing on the stock market you really have a lot to think about, and a lot of factors come into play.

All is not lost yet, it is now down to a few seats and who the three independents will side with. So at this point I am a little behind but…. lets see what happens tomorrow.

Cheers

Mr Ed.

Well the Australian Elections were held on the weekend and my prediction has not been fulfilled yet. It looks like there will be a hung parliament, with the balance of power going to independents. I am still tipping that the vote will go to the  conservative opposition party. What it has meant is that the stocks I bought on the strength of the election outcome, have increased today, as I thought they would. Adding strength to my theory, that people as a group tune into certain stocks and are influenced by the same events.

That said the trick is to get ahead of the crowd and try to be in before they all start buying or selling. Here at Expanding Wealth for today at least we are a little happy.

Cheers

Mr Ed