Karpel’s Corner: Bulls, You’ve Been Greenspanned!

Welcome to Karpel’s Corner. This is where I throw out my thoughts on the markets and share some of my favorite strategies. I keep it market-focused, and never miss an opportunity to teach trading strategies and commentate on the latest trends affecting the financial markets. Hope you enjoy today’s post!

Alan Greenspan just couldn’t help himself. In an interview this week, the former Fed Chief said the market was due for a “significant correction.”

While Greenspan hasn’t been the head of the Federal Reserve for years, people still listen when he has something to say. So, you would think he would know better than to go public with such a point of view. But, heck, he is 88 after all. And if the hedge fund guys can do it, why can’t this retired yet important and influential Federal official do the same?

In spite of what Greenspan said, with the major averages breaking mid- and long-term support, this is not a time I would be looking for buying on the dip, especially with a new trading month and a weekend in front of us.

Looking at the Small Caps, it definitely looks like a Double Top, a bearish technical formation, is in play and we could see some potentially volatile if not damaging trade downward. Continue to manage the winners you have at this time, roll the untested sides of your option trades and most importantly:

DO NOT PANIC.

Don’t miss out on the webinar I will be hosting today from 12:00 PM to 1:00 PM CST at https://www1.gotomeeting.com/register/905239849. In it, I will discuss the importance of trading using TECHNCAL ANALYSIS, a method of evaluating securities by analyzing statistics generated by market activity.

See you next time at the Corner!