A damaged market needs a “capitulation” phase followed by a “base-building” phase. Each phase defined by trading volume because trading volume confirms a trend. During “capitulation”, investors “cave-in” with dramatic selling, and significant way-above-average trading volume.

I wrote this a few weeks ago, and forgot to enter the thought. Maybe/maybe not, we have seen capitulation. Today’s U.S. market activity suggests that probability. Today’s (September 29, 2009) foreign market activity may validate this presumption.

This entry was posted on Monday, September 29th, 2008 at 8:46 pm and is filed under Investing, Stock Market, Stock Market News, mutual funds, stock market sell-off. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.