Be carefull of the first bounce .... Not for ....

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Derek  7 Feb 2018


You need to be very careful of the first bounce after a large drop. Corrections usually come in ABC. A=First drop, B=First bounce and C=Final drop. You do get the odd occasions where it was a wedge drop, Unfortunately I cannot tell which one it is. I prefer to see divergence after a drop.

The US and the East are very volatile. Bulls and Bears are having a good fight at these levels. You can decide to join the fight or wait for stabilization. Notice that although the DOW closed positively, its low was still below the previous day and we are way below the EMA8 line.

Coca-Cola could not even bounce to close positively. Only if you have hair on your teeth must you venture into this market.

JSE Technical:

Bidvest bounced from first support, but FrontRunner is not convinced about this bounce.

I repeat again, this market is not for the faint hearted. Rather wait for more stabilization.

Enjoy your day
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