Sunday, April 6, 2008

Anticipating a rebound in US


As we know most of the markets in the other region take cue strongly from the US market, therefore it is worthwhile to take a look at the US chart. I have attached a weekly chart of S&P 500 large cap index ending this week.

On a positive note, you can see there is a positive divergence developing on the MACD histogram. Also its MACD line is about to cut signal line from the bottom which indicates a bullish sign. However there is just a slight increase in volume for this week prior to previous week to really justify a reversal.

Even though I still expect volatility to stay in the mid term, I am anticipating a reversal in the short to mid term. You might want to monitor the volume in US for the up-coming week or wait for confirmation from the MACD line crossover before triggering a purchase.

In order to minimise risk of buying at a high, you can stagger your purchases at different period. Nevertheless if you are a long term investor, this is a good chance to do some bargain hunting if you have not done so previously.

2 comments:

durio said...

looks good though i don't understand how it could (rebound) amidst the bad announcement recently

time to topup on S&P500 index funds

Mike Dirnt said...

if you notice after the recent bad announcements, market did not suffer heavy sell dow and is still resilient. if you are a long term investor, good opportunity to pick up.