It is so important to realize when the market hands you clues to use when trying to dictate direction. On the night before Thanksgiving, news hit the wires that Dubai is requesting an extension on repayment of it's loan. Then on the day of thanksgiving the LSE was shut down due to price depreciation, and little was reported of this. When the US market opened up for trading on Friday, it was down triple digits and picked an unusual day to notify traders that more problems are facing the financial sector. The problem that is shaking the global markets is that Duabi is heavily supported by foreign investors such as China, Japan, and many European countries. The problem is the US relies on China to keep buying our T-bills in efforts to bail us out of our economic woes and with the banks still fragile may now have to pony up for a rescue plan for this desert Oasis which is now starting to look like a mirage. This could derail the current uptrend that we are facing as the dollar may become the safe haven for foreign investors, lowering the price of oil and spreading fears of panic again if the Dubai economy turns to sand. There is a Dark shadow with commercial real estate looming and if this plays out could be the tip off to the second down trend that many have been cautious of since the markets recent uptrend. Monday 11/30/2009 will be the true test of major selling or will the market shake off the bad news and move higher? Stay tuned as this story develops. Looking around the charts have notice that we are seeing quite a few bearish patterns setting up and that spells trouble. An example of this is a Head and Shoulders Top on the stock symbol TEX.
As stated in our last post the market is showing sign of cracking so now longs pay close attention and pick a spot that you are happy with profits for winning at the game of investing is letting the market lead the dance and taking profits on a regular basis. To get more charts like these try our free 2 week trail and learn the clues the market provides at http://www.themoneychart.com/. Remember it is not what you make on your stocks but what you keep. As always, take all ye can and give nothing back.