Volatile stock market = perfect timing for momentum trading

An article by Punit    2 Comments

Month of May 2010 so far has proven to be very depressing for usual investors. European debit crisis coupled with several other worldwide events such as BP oil spill, China’s announcement regarding potential pullback in European bonds, tension between North and South Korea, are taking a major toll on the market currently. Euro is trading at 4 year low level and DOW traded under 10,000 market after February.

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Saddest part is the fact that several US indicators are suggesting a bull trend in the market, however the indexes are still crashing around the world.

Doesn’t it make you question! WHAT IS GOING ON??

We might have the answer. Is this another trick for big market makers and hedge fund analysts to instill fear in common man’s mind so as to make them panick sell and bring down the market price of otherwise lucrative shares. Look at few previous examples of the companies which reported their 2010 Q1 earnings. Yahoo is trading below 15% mark following its earnings announcement. Lot of other companies including home depot (HD) have the same story.

What does it tell us? As far I can tell, this is a huge opportunity to load the boat. Bottom is either already in or is very close. There will be a huge bull rally within next few weeks and new records will be set.

People who invested in Ford, C etc last year in summer, they got a chance to roll in wealth. But back then people were afraid and according to Buffet, that is the best time to invest. When people are freaking out, you put your money into the market. Bigger the fear, better the ROI. Ultimate truth time only will tell. But if you were to make a guess based on recently produced numbers from US economy suggest only direction, which is north!

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