On 05 September 2008, Friday, Wall Street displayed how volatile can a market gets as Dow Jones Industrial Average Index, DJI, bounced back (V-Formation) from more than 100 points of losses and settled at during the time of post, midday down by 10.01 points or 0.09 percent.
Those who have bought on bargain hunting are awaiting the market to bounced its way into the green zone. While on the other side of the coin, those who sold short must have been watching with great fear hoping that the market would not recover into the green.
Lots of money were seen pulling away from Energy stocks, the used to be market darlings are now turning the target of short. Many believed that the recovering or paring of losses towards midday are the cause by short-covering. Well, a technical recovery is reasonable but bouncing its way back into mixed and green zone should be a sign that selling are getting exhausted. Panic selling had stopped, people are picking up valuable shares for investment. The pull back of commodities is caused by the worries and fear over global slow down which may leads to lower demands. While it make senses for Investors to do so as commodity price are already at a very unreasonable peak sometime ago.
5 days of consecutive falling Dow Jones may signal further worries over global economy which may keep investors on the sideline until the time is right. Recovering and bounced back could see some resistance in the subsequent trading sessions. On this early part of the trading session on 5 September 2008, the focus were on Nokia fallout and Jobless Claims data which led the market southwards.
The above are of personal opinion and not at all an inducement to trade.