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Disclaimer: All communication from ChartYourTrade is general in nature and for educational and general informational purposes only. Under no circumstance should it be considered personalized investment advice. All our work is general in nature and not specific to any one person. All the information on this site and/or that originates from us, or any of our partners or affiliates, is for educational and informational purposes only and is NOT a recommendation to buy or sell anything. To avoid any conflicts of interest, we do not have a working relationship with any of the companies mentioned in our work. Furthermore, we may have a long, short, or no position in any, or all, of the names that appear in our work and they may change at any time without notice. Investing and trading in capital markets or using margin carries a high level of risk and may not be suitable for all investors. Leverage can work against you as well as for you. Before you decide to invest or trade in capital markets you should carefully consider your investment objectives, level of experience, and risk appetite, among other factors. The possibility exists that you could sustain a loss of some, all, or more of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with capital markets, investing/trading, and seek specific investment advice from an independent financial advisor and other professionals. Remember all the information we provide is for educational and general informational purposes only and is subject to change without notice.
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Stocks Fall After Nikkei Plunges over 6% As Correction Deepens!
Monday, March 14, 2011
Stock Market Commentary:
Japan’s benchmark Nikkei index plunged over -6% on Monday as the country struggles to contain the effects of Friday’s devastating earthquake. The 28-week rally, which began on the September 1, 2010 follow-through day (FTD), ended on Thursday March 10, 2011 when all the major U.S. averages plunged below their respective 50 DMA lines on heavy turnover. The current crisis in the Middle East remains in flux which is putting upward pressure on oil and gold and downward pressure on equities. The benchmark S&P 500 is up nearly 100% from its March 2009 low, and still about -16% off its all-time high from October 2007.
Earthquake Aftermath, Demand Destruction, and More Unrest In The Middle East:
On Monday, the Bank of Japan (BOJ) said it would disperse a record amount of cash into the financial system and double the size of its asset-purchase plan to spark economic growth and curb the adverse affects of the nation’s worst earthquake on record. The BOJ pumped 15 trillion yen ($183 billion) into money markets on Monday to assure financial stability which did little to calm investor’s woes. Japan’s benchmark index tanked over 6% and credit risk spiked. This ominous action reaffirmed concerns that demand destruction (i.e. slower economic growth) will continue for the near future which hurts all asset classes. Elsewhere, riots spread in Bahrain and the civil war continued in Libya which raised concern of more civil unrest in the Middle East.
Market Action- Market In A Correction; 28-Week Rally Ends
All the major averages sliced below their respective 50 DMA lines on Thursday, March 10, 2011. Then, on Friday, all the major averages except for the tech-heavy Nasdaq composite managed to repair that damage and close above their respective 50 DMA lines which was a healthy sign which marked Day 1 of a new rally attempt. However, Friday’s lows were promptly breached on Monday as all the major averages dove below their 50 DMA lines on heavy volume. This ominous action reset the day count and reiterates the importance of raising cash and playing strong defense until a new FTD emerges. If you are looking for specific help navigating this market, please contact us for more information.
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© ChartYourTrade | Contact us: website@chartyourtrade.com
Disclaimer: All communication from ChartYourTrade is general in nature and for educational and general informational purposes only. Under no circumstance should it be considered personalized investment advice. All our work is general in nature and not specific to any one person. All the information on this site and/or that originates from us, or any of our partners or affiliates, is for educational and informational purposes only and is NOT a recommendation to buy or sell anything. To avoid any conflicts of interest, we do not have a working relationship with any of the companies mentioned in our work. Furthermore, we may have a long, short, or no position in any, or all, of the names that appear in our work and they may change at any time without notice. Investing and trading in capital markets or using margin carries a high level of risk and may not be suitable for all investors. Leverage can work against you as well as for you. Before you decide to invest or trade in capital markets you should carefully consider your investment objectives, level of experience, and risk appetite, among other factors. The possibility exists that you could sustain a loss of some, all, or more of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with capital markets, investing/trading, and seek specific investment advice from an independent financial advisor and other professionals. Remember all the information we provide is for educational and general informational purposes only and is subject to change without notice.
Charts and Data are courtesy of MarketSmith Incorporated. Join MarketSmith here.
Terms of Service