Posted on February 28th, 2008 at 11:18 AM

So in looking at the timing mark from my previous post we did meet a bit of resistance around the 19th of February. However, this level has since been broken to the upside. Does this mean that all my work was a waste of my time? Not one bit. I had an edge there and had a good call that just turned out to not work completely. That area around the 19th put a lot of pressure on the market, but the market eventually overcame it. Thats life in the markets. I have an updated chart below.

“For every action, there is an equal and opposite reaction” is a scientific principle that, with a little twist, might be applied to trading. Even the strongest price action cannot continue in one direction forever, so, after a market moves up or down, traders expect some kind of reaction. They may call it a “correction” or a “bounce,” and it may show up on a price chart as a “flag” or “triangle” or one of the other patterns discussed in earlier articles in this series.

By Anthony Trongone, Ph.D., CFP, CTA*
Posted: February 29, 2008

With the markets suffering a nasty correction, are you still trying to catch every little upside ripple? Despite the economic concerns of doomsayers, who are actively warning us to stay on the sidelines until the dust finally settles, are you still trying to recover earlier losses?

After a string of unprofitable days, there is an impulsive tendency to buy into rallies. Unfortunately, during a bearish market, the investment community often sells into any short-term upswing. Nevertheless, fortunes are made by buying at the bottom. But, how do we know when the bear is safely hibernating?