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Monday, March 5, 2007

Sharp fall in the stockmarket

Why did the global stockmarkets fall so much, so fast?

The answer is simple. When the market falls, the buyers stay away. Some of the weak holders (on margins) are forced to liquidate. The hedge funds come in to sell in large quantities.

This result in a sharp and steep fall in the market. And it can continue for several days.

When will the market rebound?

When all the selling has been done. The buyers decide that it is time to re-enter the market and buy the stocks at cheap prices. You can expect a sharp rebound.

What is a good timing? I don't know. The professionals, who are in the market everyday, may be in a better position to get the market reading and make the right judgement. The small timers will always lose out.

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