EBI didn't recover today with a close at $4.40. EBI had an intraday high of $5.25 on the 26/2/2007 and the trend has definitely broken. I highlighted this one as an ASX opportunity looking weak after yesterdays sell off. I'll wait until Monday before deciding on the others that closed below our stop loss.
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Below is an image from The Wall Street Journal that shows the data glitch that occurred, causing the sell off to look more dramatic then it really was.
The US market revived as Federal Reserve Chairman Ben Bernanke soothed markets, increasing investor confidence at least for the short term. China, The Dow, S&P 500 and Nasdaq Composite Index were all up yesterday and the ASX is expected to open higher following these recoveries.
"Strategists expect a correction of between 5 and 10 per cent over the next four weeks - similar to that in May and June last year - but emphasised the market's bull run was far from over because the fundamentals remained intact." SMH
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The All Ordinaries closed down 2.45% or 148.1 points, matching the losses of China, US and Europe. Although IDL and EBI closed below our stop loss I'm inclined not to recommend any sells until we view the close of US market tonight, but EBI is a possible sell based on its close.
We noticed a lot of the ASX opportunities closed higher from the early sell off, with CHC the only stock closing higher than its open reaching an intraday high of $3.01.
There are bargains to be found in these market conditions that fit both a technical and fundamental strategy, but new positions should be made with caution as market conditions could show more volatility.
EVE is one stock that fits our criteria of entry recently pulling back to $.315 the recent high yesterday of $0.40.
Good luck to all over the next couple of days and please check out Trader Feeders post on what usually occurs in the US market after a 3% loss in one day.
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How is the market going to react today. The DOW dropped 416 points (3.29%), with as much as 546 points during the days trading before recovering. This was the biggest days drop since the Sept. 11, 2001, terrorist attacks.
Trader Mike discusses how traders on the floor alleged bad data with "some sort of technology bottleneck was responsible".
The ASX will be looking at a similar drop based on other markets throughout the world. The NZX 50 as of 11am local time was down 3%.
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