Tuesday, August 9, 2011

The Bulls Fight Back

There was a 600 plus point intra-day swing in the Dow Jones Industrial Average today. An ugly battle was waged between the bulls and bears. The bulls ended up winning the skirmish. If they continue to dominate in the days ahead, today will be considered a reversal day. If we then develop a series of higher highs and higher lows going forward investors will believe that the longer term uptrend has resumed and quickly chase the market higher. Investor are more likely to buy in an uptrend. I was encouraged by today’s action, but follow through is required for me to gain enough confidence to put money back to work in stocks. There is an old wall street saying that says: Don’t try to catch a falling knife.

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