Fall from Greece

And you thought that the market would go up January. Historically, the stock market goes up in December and there's a follow through in January. After reaching a high of 3,121 last January 14, the market has tripped all the way to 2,855 last February 5.

A 9% drop in value.

This is just the index. What about individual stocks? Well, they're definitely much worse, sad to say. A few posts back, we mentioned that the market was ripe for a correction. One of the critical signs that the market is about to peak is when basura stocks are going up like crazy.

Who would have known that we'll be where we are today? Markets worldwide just fell through the roof.

Of course, warnings are just that... warnings. Nobody can predict with precision when exactly these corrections happen. It's just wise to stay ahead of the curve. But how?

I suppose when you're more careful, you'll be less and less exposed (i.e. invested) when you have a nagging feeling that the market is close to a peak. One way of staying ahead of the curve is to be able to read charts. Now, a charting software is in order.

The PSE has its a site with crude charting available. If you don't have a full fledged software, you can just stick to what they can offer.

The first step is not just looking at your favorite stock's chart but to look at the entire index first. Your stock will just follow the direction of the index.

If you don't have the patience or attitude for chart reading, you can just read the news and just look at the overall trending. Obviously most of the news have been negative, recently, there's been a focus on Greece and its potential for debt default.

Because they're part of the EU, most of the European share markets fell. For one reason or another, other markets in the world, notably Asia were also dragged down. The US market is also in the brink of falling through the 10,000 level. Wonder if that will happen.

Of course, the falling of these markets is not entirely due to the default risk of Greece. Unemployment in the US is still high, the Chinese wants to impose tightening, metal prices and oil are falling across the board. Perhaps people are doubting the recovery story.

Most of the markets may have gone way ahead of themselves last year. Now that people realize that the recovery isn't one straight line up, doubt and fear have set in. When that happens markets fall.

If you're a trader, now is not the time to be buying. Wait for some signs of stability.