« Make Monthly Payments Easier by Refinancing Student Loans | Main | Get Time Proven Advice – Auto Loan Financing Factors »
{The Candlestick Justification in Favor of a Perpetual Short Position in the S&P 600}
By plrprousers | December 5, 2008
{
How fast time does fly. It is now over a year since the markets posted a major long-term High. It was marked by a classically bearish Japanese Candlestick formation, and has been attended all the way down during the decline by a assemblage of quite similar bearish formations. The financial implosions attending the near-collapse of the entire national financial system during the last several weeks, leading up to enactment of bailout legislation, drove many investors to a state of deep concern about the value of, and prospects for, their hard-earned savings.
}
{
It is terribly unfortunate that such a multitude of people have worked so hard all their working lives to save something for old age, now to be faced with a serious decline in the value of their shares of stock – and the likelihood of worse to come. What is even more unfortunate is that they have no comprehension of the defensive steps which they could have undertaken beginning in October 2007, and should be taking right now and into the foreseeable future.
}
{
There is no need to be a “deer in the headlights.” The Japanese Candlestick formations which have formed during the past several weeks reveal the strength of this secular bear market, and the need to compensate for it so as to defend the value of the investor’s portfolio.
}
{
There is “insurance” available. It is found in the form of Inverse Stock Index Funds and Inverse Stock Index Exchange-Traded Funds. There are many of them available on the open market, offered by respected and stable firms. The goal of such funds is to increase in value when the particular Index to which they are tied decreases in value. Some of them work on an unleverged basis – as an example, a given Exchange-Traded Fund might be structured to increase one dollar in value for every dollar by which the NASDAQ 100 decreases in value. Many of such funds are leveraged, for example on a two-for-one basis.
}
{
I believe that the country is ensnared in a secular bear market which is just now gearing up for a devastating depression I am in favor of the idea that every investor should create and maintain a ”Constant Short” position, using either an Inverse Stock Mutual Fund or an Inverse Exchange-Traded Fund as the means by which to accomplish that end; and that he or she should be depositing funds into that “insurance plan” consistently, on a regular basis. It is even possible, this way, to completely offset the possibility of loss in a portfolio. Certainly, any degree of offset would be welcome. Addtionally, it is possible to make an absolute profit, too.
}
{
Stock and Index prices move in waves, which are clearly visible on price charts. While a “Perpetual Short” regime can be extremely valuable in protecting the worth of one’s portfolio, deft use of Candlestick analysis can also be extremely useful in the identification of countertrends which can be harvested for gain in upward countertrend corrections in a bear market. Various methods of technical analysis can also be a boon in spotlighting the likely end of a countertrend rally and in pointing to a classic opportunity to “pounce on the bounce” for added profit to the downside.
}
Tags:candelaabra,candlestick,candlestick formation,candlestick forum,candlestick pattern,candlesticks,candlesticks formation,candlesticks forum,candlesticks pattern,formation,forum,japanese candlestick,japanese candlesticks,japanese candlesticks forum,pattern
Related posts
Topics: General | No Comments »
No Comments
You must be logged in to post a comment.