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Wednesday, April 21, 2010

The real situation in US stock market.


The above chart dated 20/04/2010 shows that the rise in Dow Jones Index was not accompanied by rising trading volumes which can only mean that Dow Jones Index can fall easily as it is not well supported.  If the Dow Jones Index is well supported, buyers will be buying up the index as they feel that the index level is cheap but this is not so.  As the index goes higher and higher, there are lesser buyers buying up. Why?

This could only mean that the buyers felt that the index had moved up ahead of  its fundamental and was no longer cheap to buy.

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