Is Everything Caught in a Trap like Elvis Once Described?
Is everything - stocks, bonds, oil, gold, - caught in some sort of trap? It sure looks that way. In the terminology of technical analysis, these items are considered to be in a "trading range." They go up, they come down. For the most part, they don't go up much higher than last time they went up; ditto for them going down - the price tends to cease falling around the spot where the last fall occurred.
So a trading range can feel like a trap, in that you can't move. You're constricted. You're in a little cell..."You" being the various markets.
Some exceptions over the last few weeks are the NASDAQ, which did break out to an all-time high before it headed down again. But the other indices have pretty much behaved themselves, like horses taught to stay inside a corral behind a fence. Except that at some point one or more of these horses will hop the fence and gallop off - the investment term being "break out." And that break out will either be to the upside or the downside.
Meanwhile, this "trapped" feeling reminds me of Elvis Presley's 1969 hit song, "Suspicious Minds." Since we're just kind of hanging out waiting for the various markets to decide which way they ultimately want to go - up or down - let's take a listen to "The King" crooning his old hit.
So a trading range can feel like a trap, in that you can't move. You're constricted. You're in a little cell..."You" being the various markets.
Some exceptions over the last few weeks are the NASDAQ, which did break out to an all-time high before it headed down again. But the other indices have pretty much behaved themselves, like horses taught to stay inside a corral behind a fence. Except that at some point one or more of these horses will hop the fence and gallop off - the investment term being "break out." And that break out will either be to the upside or the downside.
Meanwhile, this "trapped" feeling reminds me of Elvis Presley's 1969 hit song, "Suspicious Minds." Since we're just kind of hanging out waiting for the various markets to decide which way they ultimately want to go - up or down - let's take a listen to "The King" crooning his old hit.
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