Flushing exercise looks to be complete
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And so, as is always the case with these intense downdrafts that when you are in the middle of them seem to go on forever, it looks like a lot of flimsily capitalised players were flushed down the pan today on their positions.
Bull signs that lead us to have high conviction in our index longs entered today –
1. S&P 500 & FTSE 100 are both excessively oversold on and hourly basis
2. S&P & FTSE touched important 200 day ema’s
3. Put:Call ratio in the US trading for the 3rd day around the 1.2 level – a very strong signal
4. Friday afternoon torpor – “babies being thrown out with the bath water” that we can see in may stocks.
The lesson? ALWAYS ENSURE YOU HAVE A FREE POCKET OF MARGIN AVAILABLE TO ‘GO’ WHEN THE OTHERS ARE HAVE HIT THE STOP SIGN!
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