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Strategies & Market Trends : Humble1 and Swing Trading Friends

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To: humble1 who wrote (11490)	10/11/2013 6:30:05 AM
From: POKERSAM	Read Replies (1) of 41413

H1 No, I had no clue there would be an offer from the Republicans taken to Obama. I believe that was the catalyst that precipitated the relief rally. Relief rallies are a common phenomenon that take place when there has been a protracted period of consolidation in a down move or a protracted period of decline. The psychology of the herd is such that it can only maintain one position for so long and once the feeling of extreme tension is reached it is as though a rubber band stretched to its maximum, snaps. This is why so many analyst pay close attention to sentiment indicators. When optimism peaks you are near a top and when pessimism peaks you are near a bottom. I have found this site to be very helpful as it brings together the most used sentiment indicators in one place. Compare the chart provided to the course of the medium term market and you will see the close correlation. Note the close on Wed. was extreme fear at 22. The market was a like a tinder box and all it needed was a spark to set it ablaze. The Republicans provided that spark with hope of a deal, and off it went. This is all just my opinion of course and I could be wrong. money.cnn.com

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