Given that markets will open tomorrow because of the somewhat obvious fact that the world did not end it is worth looking at the Dow from two different perspectives.
As you can see from the chart below the long term trend of the Dow is roughly intact.
You can see that I am not a fussy drawer of trendlines – I tend not to get my gonads in a twist if every single point on the chart doesn’t exactly match up with every single data point. I just want to know the broad sweep of price.
The daily chart looks a little different with prices pulling back from their recent highs.
These two charts are of the same instrument but they offer differing perspectives and this is sometimes confusing to traders who’s approach is one of being fundamentally myopic and lacking in longer term focus. I accept that if you are a trader with a short term focus then the daily chart is the one you tend to concentrate on but event then the true story can get lost in the noise that you are being bombarded by. It is necessary to take a step back and look at the whole picture.
The picture of the Dow contrasts strongly with our market which continues its march sideways.
All this says to me is that there are times to be an equities trader and times not to be.
