Monday, April 26, 2010
Technical Support: Signs Point to More Stock Gains
The article continuing economic recovery. According to the technical analysts who look at internal signals in the stock market, there are signs of gains in the market. This is important to the economic stabilization.
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This article was very brief and claimed that momentum will continue to push the market up. The technical analysts that use mathematical models to determine movements of markets and previous trends will typically be profitable in the short run (day or swing trading). However, these systems cannot identify any potential shocks to the economy (Greece's possibility of default) into their models. This means that any traders using these technical models, that have entered long positions in the market, could potentially see large losses. This may have been the case yesterday when the Dow Jones fell over 200 points. Losses could continue to be seen if any further shocks are to hit the economy. I believe that any technical analyst should keep in mind any exogenous variables in the world economy.
ReplyDeleteTech stocks improve however the huge doubts about Greece brought down the market in a big way yesterday. Many stocks will fluctuate with the new news that comes available with Greece.
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