Is This Market Rally Over?

As I sit here watching the market action at 10:30 in the morning, I’m looking for any sign that the market may show some life – any attempt to cut today’s terrible losses and at least try to finish in the upper half of the day’s range.


So far, the market juts looks plain awful. Looking at the chart, does this spell the end for the current uptrend?

The catalyst this time is a serious one: a downgrade in the outlook of US government debt by S&P.

The bond rating for US government debt is AAA, but S&P lowered its outlook to negative which raises the chances for an actual downgrade of the US’s sterling AAA credit rating. This could wreak all sorts of havoc if that occurred.

It is no wonder gold is up today. However, with silver showing hesitancy after a very strong advance, maybe gold and silver will also take a breather.

As far as breakout stocks go, I’m laying off any new purchases for the moment. In fact, I dumped my last two stocks Friday, RAX and DE. DE I lost money on, RAX I made a small profit in. This market showed initial success and money making opportunities with a few notable breakouts in such names as OPEN, BIDU, TZOO, LULU, RAX and others. Now, however, this market looks awful again.

All corrections lead to base building, which is a good thing. It’s best to keep an eye on top quality stocks and wait for a new uptrend in the future.