Expect the Unexpected: The Market Could Soon Bottom

CSE.SAS · 1 Expect the Unexpected: The Market Could Soon Bottom Wed May 30, 2012 4:11 am

CSE.SAS

Global Moderator

Posts : 2620
Equity Stars : 11281
Reputation : 158
Join date : 2011-02-02
Age : 37

Calling a stock market bottom is tough, to say the least.

However, the method I'm about to share with you can increase your chances of spotting a market bottom early enough to cash in on the first big moves.

A stock market bottom will always signify the end of a Bear Market. A Bear Market is a condition where stock market prices have been falling over an extended period of time.

The start of a Bear Market is generally defined as a major stock market index, or indices, dropping in price by 20% or more over at least a 2-month period of time.

The length and severity of Bear Markets vary, but one thing is for certain, people's investment accounts drop in value substantially.

No one likes losing money, so overall Bear Markets are not welcomed with open arms.

There is however, a small group of sophisticated investors that rejoice during Bear Markets because they realize that everything is on sale.

They also realize that fortunes are either lost or made during Bear Markets and they plan on being on the gain side of the equation.

smallville

smallville

Associate Director - Equity Analytics

Posts : 4119
Equity Stars : 10100
Reputation : 530
Join date : 2011-02-03
Location : Back on Earth

Where's the source?

Hanoifortune

Hanoifortune

Senior Manager - Equity Analytics

Posts : 478
Equity Stars : 5081
Reputation : 11
Join date : 2012-05-09

I think mkt will bottom out when the last tranche of IMF loan come to sri lanka.

CSE.SAS

CSE.SAS

Global Moderator

Posts : 2620
Equity Stars : 11281
Reputation : 158
Join date : 2011-02-02
Age : 37

smallville wrote:Where's the source?

Dear smallville

I read about market bottom in various resources and concluded in my view.

If u need source for this article,I will add reference list and bibliography as soon as possible.

I m searching source for this articles too..

Thax

Focus your energies on answers -- not excuses.
http://forum.srilankaequity.com/t17802-focus-your-energies-on-answers-not-excuses

Try to be better than yourself
http://forum.srilankaequity.com/t17793-try-to-be-better-than-yourself

Not to fight is not cowardice, “live to fight another day”.
forum.srilankaequity.com/t18351-not-to-fight-is-not-cowardice-live-to-fight-another-day

Antonym

Antonym

Vice President - Equity Analytics

Posts : 1090
Equity Stars : 7443
Reputation : 275
Join date : 2011-02-09

Bottom Spotting
The double bottom pattern is a reliable technical pattern: Index will hit a low on heavy volume, then bounce back up and then retest the previous low on light volume.

The key is to watch and see how the ASI behaves when approaching that second low point. If the index has a sizable break below the previous low, the bear market ain’t over..! However, if the index bounces off that low, a double bottom pattern is forming.

In addition, look for volume being low on the downward moves and high on the upward moves; this indicates the market bottom.

CSE.SAS

CSE.SAS

Global Moderator

Posts : 2620
Equity Stars : 11281
Reputation : 158
Join date : 2011-02-02
Age : 37

Antonym wrote:Bottom Spotting
The double bottom pattern is a reliable technical pattern: Index will hit a low on heavy volume, then bounce back up and then retest the previous low on light volume.

The key is to watch and see how the ASI behaves when approaching that second low point. If the index has a sizable break below the previous low, the bear market ain’t over..! However, if the index bounces off that low, a double bottom pattern is forming.

In addition, look for volume being low on the downward moves and high on the upward moves; this indicates the market bottom.

Generally, volume in a double bottom is usually higher on the left bottom than the right. Volume tends to be downward as the pattern forms. Volume does, however, pick up as the pattern hits its lows. Volume increases again when the pattern completes, breaking through the confirmation point.
Monitoring volume is a key aspect of determining whether or not a double bottom is valid.

wmdcf

wmdcf

Manager - Equity Analytics

Posts : 126
Equity Stars : 6047
Reputation : 17
Join date : 2011-01-29

CSE.SAS wrote:

Antonym wrote:Bottom Spotting
The double bottom pattern is a reliable technical pattern: Index will hit a low on heavy volume, then bounce back up and then retest the previous low on light volume.

The key is to watch and see how the ASI behaves when approaching that second low point. If the index has a sizable break below the previous low, the bear market ain’t over..! However, if the index bounces off that low, a double bottom pattern is forming.

In addition, look for volume being low on the downward moves and high on the upward moves; this indicates the market bottom.

Generally, volume in a double bottom is usually higher on the left bottom than the right. Volume tends to be downward as the pattern forms. Volume does, however, pick up as the pattern hits its lows. Volume increases again when the pattern completes, breaking through the confirmation point.
Monitoring volume is a key aspect of determining whether or not a double bottom is valid.

Source : http://www.trending123.com/patterns/double_bottom.html#VolumeImportantDoubleBottom

aj

aj

Assistant Vice President - Equity Analytics

Posts : 766
Equity Stars : 5433
Reputation : 45
Join date : 2011-11-25

I wonder does the share prices go up and down like a sine wave without any other reason. Even if another third world war starts or if the economy is going not so good or if the company performance is flat. Does the share prices go up and down like the earth going around the moon. Why do you think this is bottomed out or something? Do you see another war has ended? Do you see the company performance doubling? Do you see company profits going up? Do you think the share prices should go to the level which they were 2 years ago? Why do you think the people bought 100 shares at 300/- then? Were they expecting company performance to double or triple now? Did it happen? What if the share price was at those levels 2 years ago? Wouldn't it be absurd right now? Why do you think single digit PE undervalued? What happened in the last 3 years in the companies or the economy? Singapore became one of the wealthiest countries in the world in 10 - 20 years. You see it'll happen in here. How long does a newly carpeted road or a newly built pavement last in Sri Lanka before it goes into bits and pieces? Few weeks? Have you seen that exhibition grounds in Anuradhapura now? It was a huge forest area now it's a desert.

wmdcf

wmdcf

Manager - Equity Analytics

Posts : 126
Equity Stars : 6047
Reputation : 17
Join date : 2011-01-29

smallville wrote:Where's the source?

http://www.learn-stock-options-trading.com/stock-market-bottom.html

Backstage

Backstage

Moderator

Posts : 677
Equity Stars : 5554
Reputation : 28
Join date : 2011-04-14
Location : Kotte

Maybe we can watch Preity Zintas wonderful double bottom until the CSE obliges.
(no offense guys)

Whitebull

Whitebull

Assistant Vice President - Equity Analytics

Posts : 876
Equity Stars : 5385
Reputation : 33
Join date : 2012-05-15

Backstage wrote:Maybe we can watch Preity Zintas wonderful double bottom until the CSE obliges.
(no offense guys)

Api wage retailors lata ekath heenen thamayi malli lol!

Sponsored content

Name*:
Phone number:
Email address*:
Comments*:
* - required fields	Learn

Name*:
Phone number:
Email address*:
Comments*:
* - required fields	Learn

Latest topics

Expect the Unexpected: The Market Could Soon Bottom

1 Expect the Unexpected: The Market Could Soon Bottom Wed May 30, 2012 4:11 am

CSE.SAS

2 Re: Expect the Unexpected: The Market Could Soon Bottom Wed May 30, 2012 6:56 am

smallville

3 Re: Expect the Unexpected: The Market Could Soon Bottom Wed May 30, 2012 7:16 am

Hanoifortune

4 Re: Expect the Unexpected: The Market Could Soon Bottom Wed May 30, 2012 7:33 am

CSE.SAS

5 Re: Expect the Unexpected: The Market Could Soon Bottom Wed May 30, 2012 7:45 am

Antonym

6 Re: Expect the Unexpected: The Market Could Soon Bottom Wed May 30, 2012 7:51 am

CSE.SAS

7 Re: Expect the Unexpected: The Market Could Soon Bottom Wed May 30, 2012 9:03 am

wmdcf

8 Re: Expect the Unexpected: The Market Could Soon Bottom Wed May 30, 2012 9:04 am

aj

9 Re: Expect the Unexpected: The Market Could Soon Bottom Wed May 30, 2012 9:05 am

wmdcf

10 Re: Expect the Unexpected: The Market Could Soon Bottom Wed May 30, 2012 9:16 am

Backstage

11 Re: Expect the Unexpected: The Market Could Soon Bottom Wed May 30, 2012 9:44 am

Whitebull

12 Re: Expect the Unexpected: The Market Could Soon Bottom

Sponsored content

New topics