Over the past several days we have seen the market drop several hundred points due to the Middle East turmoil, the Japan crisis, and the overall economic uncertainly of the global economy. The above chart (DJ 30) gives a quick snap shot of the index over the past 1 year. We are seeing the Stochastic indicators come back up from their lower levels, market trading above the 50 and 200 day moving average, but the Chaikin Money Flow chart has dropped over the past month.
I personally believe that the market is continuously reacting to the same negative news and is the reason behind the drop in the stock prices over the past several days. Media reports the same bad news about Japan and the Middle East every day and the market keeps dropping. How many times can you sell on the same news? The fundamentals haven't changed, the crisis is the same, but the perception of the crisis has changed due to the continuous hammering of the same negative news from media giants.
Your thought...?
Saliq
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