Thursday, July 13, 2006

Another sell-off

The Nasdaq dropped below technical support at ~2070 and just kept dropping. I had to pull up the one year chart to find the next support level, that pretty much sums it up.

So the reason for the drop seems to be middle east tensions which may affect oil supplies. High oil prices add to inflation which leads to rate hike concerns again. So I'm wondering how is it possible that the market can go up in the longer term if high oil prices have such a negative impact on the market. For what reasons would oil prices actually decline and stall at a comfortable level? I can't seem to think of one.

The market should technically bounce according to the CCI and Stoichastics. The volatility indicator isn't quite high enough to justify panic selling.

In the short-term the markets may bounce but hows it possible for the market to break its downtrend when oil prices aren't going to lower significantly anytime soon?

Sounding bearish and MAD. LOL =)


compq071306

vix071306

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