IDU, which tracks the Dow Jones Utilities Index, shows the constriction of the volatility (Bollinger) bands which are also manifest on many charts at present, suggesting that a strong directional move lies ahead.
It is becoming harder with each new bailout and government moving of the goal posts of the market mechanisms that still remain, to champion a full-blown revival case for equities. It could also be different for government debt investors as we are moving into uncharted territory.
The current degree of uncertainty about the severity and length of the global recession is sure to keep puncturing the trial balloons being launched by even the most optimistic traders.
The printing presses are working overtime in a desperate attempt to reflate the ailing US economy. Will policy makers exhibit the necessary good judgment to know when it is time to put the brakes on for this massive injection of liquidity?
The bounce for the financial sector fund XLF was substantial in price terms even if the volume was not overwhelming. Clive Corcoran thinks that the $12.50 level looks like a target for the coming sessions.
The one thing that Clive Corcoran feels very confident about is that there remains a very volatile environment ahead where buy and hold investment strategies will fall even more out of favor.
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