Friday, May 7, 2010

TAIEX Outlook - Week of May 9th

My previous post indicated my belief that the TAIEX would soon be under more selling pressure. Why? The potential setup was the double top forming, as well as the Shanghai Index leading the way down. Furthermore, the past week or so has started to see some distribution in the U.S. markets. The result is a swift move back to the 200DMA for the TAIEX:

From here, I'm looking for some consolidation (sideways movement) before a lower high before moving lower once again. Again, looking at the Shanghai Composite Index, as long as it continues to slide, so goes the the TAIEX and likely the U.S. markets.

For the 6th of May, the U.S. markets got shaken up quite a bit, with the DJIA down over 1000 points at one point today. It was definitely one crazy market, and one that I even got burned in. If you need anymore reason to not be invested in the markets, today is the prime example. Whether you believe it was actually a trader error (which I don't really believe) or not, the fact is that there is no one really trading this market anymore. It's all machines and "high-frequency trading" that is going on. How can your money be safely invested in the markets when the potential for a 1000 point drop in less than 5 minutes can occur?

Anyways, here's a live clip of the crash occuring on CNBC, followed by this funny video of a guy going crazy during the crash (live as well):

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