Thursday, July 03, 2008

Wat u do not know abt Bear mkt?- Its Bear mkt Rally

Life for stock traders in bull-market is relatively peaceful and reflective, bear-market trading is far more chaotic and less forgiving.

In a bear market there is only one major game, riding the bear-market rallies long and the subsequent brutal bear-market downlegs short. These major bear rallies seemingly erupt out of nowhere and propels the rally to dazzling new heights, waiting for no one.

While buying and selling now or a month from now in bull market usually doesn’t make a massive difference in one’s ultimate trading profits, precise buying and selling in bear markets is absolutely crucial.

In bear mkts,any major trading decisions must be made by traders within hours or minutes of the time to throw long or short to have a fighting chance of earning large profits.

Timing is everything in this merciless game and the markets must be constantly monitored and evaluated in order to stay on top of the right trades.

The markets possess zero compassion and destroy the wrong with extreme prejudice. Only those fortunate enough to be right are blessed with survival and profits.

Bear market rallies are very sharp, sudden, and short-lived increase of 10% to 20% to impressive 40% in matter of days.

the birth of a major bear-market rally:
when the equity indices fall like rocks on increasingly negative sentiment and rapidly growing gloom-doom-fear. When all hope seems lost, the bear mkt rallies erupt seemingly out of nowhere on staggering volatility and scream towards the heavens. The bounces invariably form sharp patterns shaped like the letter V.

At first only the bravest of speculators throw long anticipating the sharp bear rally. In a market where most participants are petrified in fear it doesn’t take a lot of capital to force a rally.

As the bear rally is born, popular greed soars and street once again declares that the bear is finally dead and a glorious new bull market in equities had been miraculously reborn from the ashes like a phoenix…..more to come…watch this space.

5 comments :

Uma said...

interesting and scary lol

S S Cheema said...

but then why not ride the rally for all that it is worth? but yes timing is a different game altogether. Just 200 points on nifty before i turn a bear again.
Already with both short and long in one bag - not worth taking a chance.

niftyxl said...

uma,
yes,it is exciting.. ;)

cheemaji,
200pts and bear again...LOL...dont take a chance...else it will pack u up from mkt..LOL...

chk charts from 2000-2003 :)

S S Cheema said...

Aye Aye sir!

Uma said...

What is the technical up target for the rally jaggu??
have a great weekend!

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