20.08.09 Overview of the U.S. market

Shares rose on growth in volume, but the market remains in correction (Review by 20 August) Shares moved up in the second day in a row, showing modest growth, but this time at a higher level on Wednesday. Nasdaq, Dow, S & P 500 index and the NYSE are gaining 0.7%. Indexes, overcame the loss of about 0.5% as shown in the opening. The volume grew by approximately 12% for Nasdaq, and less than 1% for the NYSE. IBD 100 has changed slightly - by 0.2% from behind the broad indices, as many leaders of growth remained under selling pressure. Despite the growth in the past two days, the market remains in a state of correction. This means that purchases of shares sluet avoided until at least one of the major indexes did not give a signal to the "date of termination korektsii. The signal at the "End correction" implies a significant increase (more than 1%) on the growth of the index. To complete the formation of the signal at the start of the new growth will need to confirm who may not come until the fourth day or later to try to increase. The countdown begins with attempts to increase the first day of growth after the market is a correction. Bill continues, yet the index does not probet last minimum. Past two days of growth, therefore, constitute the beginning of attempts to increase. While no one knows how long the correction will last, or if an attempt to rally succeed, it is better to pre-compile a list of candidates for purchase. Thus, you will not be left without ideas, observing a new trend to increase the market. History shows that the day of completion of correction is sometimes very quickly. In 2003, the rally began in March after a long Bear Market. The market then went to the correction in August. But a new "day of the completion of correction gave the signal for a new rally the entire eight sessions later. This is not a prediction, but just a reminder that you need to be prepared. How to behave investor now depends to some extent on what shares you purchased during the previous growth trend. You could decide to support a strong leader if he does not give a clear signal to sell. But more likely it is that you took the cash, recorded profits and stop losses. Two of these rigid investment rules, however, did not give any options in the two cases of freedom: Sell any stock that falls by 7% - 8% below your buy point, and do not buy shares until the market is in correction. In addition, use this time to update your lists of candidates for purchase. If this correction will last for many weeks, perhaps, that many shares will form a strong new foundation. Significant news in the environment related to oil. The government reported a sudden decrease of reserves of crude oil, which increased oil prices. Of the 197 industry groups IBD succeeded tires, oil. Meanwhile, the Shanghai index of Chinese shares fell another 4%. The index - now about 20% of its maximum. Shanghai index does not always move in sync with U.S. markets, but in fact it reached a peak before the Nasdaq did so in 2007. He also began to rise before the U.S. indices. But the Shanghai index has been falling more and more severe cuts than the Nasdaq during the recent rally.