US Stocks Rolled Off Edge Of Cliff: Now What?

  By Cynthia A. Kase   Read on TraderPlanet.com   Clearly US Stocks have been declining as the drop in demand in China has finally hit hard. It’s easy to sustain robust growth from a low base, but as an economy grows, that becomes more difficult, as China’s machinations show. The spillover to the Dow Jones Index has been evident since mid-May as its been oscillating in a downward pattern since then, bouncing down the cliff, as anyone paying attention will have seen. US Stocks have now rolled off the cliff edge. Now what? Three Lessons from the Sharp Decline in US Stocks Before delving into the numbers, let’s take three lessons from the recent sharp decline. Always use stops. Monitor intraday charts when risk is high, and especially when there is a choppy sideways consolidation. Keep an eye on momentum divergence. Kase’s “drop dead” stop was around 16,750. Monitoring a 200-point range Kase Bar generated a chart which was more detailed than the daily chart, but not noisy. This chart formed a classic momentum divergence at 18351.36, allowing an exit at about 18,000 or so. Kase 200-Point Bar Chart with Divergence Charts created using TradeStation. ©TradeStation Technologies, Inc. 2001-2015. All rights … continue reading

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