Wednesday, January 19, 2011

Market patterns and investing

With the current bull market initiating around March of 2009 we see some dips or selling as the market continues to climb. One of the past two run ups one from February to May 2010 in which the DOW climbed from 10000 to 11200 and then from Sept to November 2010 when the DOW roughly climbed the same amount. If past is any indication of the future then will the DOW have a correction in February around 12000 ?

If you are a buyer: One theory in long investing suggests buying in an uptrend. However as everyone knows market comes down quicker and bigger than when it goes up. Should an investor take a risk in getting in the DOW ride or wait for a correction?

If you are already in a market and want to cash out you might be looking at good exit points:

Technical pundits typically will advise selling a stock when it moves below its 20 or 50 day line. Investors business daily has a small course on sell signals .