sofix daily

After the start of the biggest till now fall in the history of the Bulgarian most widely followed index SOFIX it has lost more than 82% of its value. The highest point achieved was 1981.8 form the first week of October 2007. Yesterday it closed at 346.87. We now have more than a year of almost uninterrupted downtrend.
Many people might have expected the new year to start with new hights. The volume traded provided no such evidence. Moreover as can be seen on the above picture, there could be a hidden divergence on the daily graph of SOFIX. This might mean that the will to go higher has no power to support the growth. On the weekly graph the trend still points south so bearing in mind the divergence we might see the previous low of 319 been broken. The next stop from there is around 220-260 where could be seen a single stop in the uptrend in the early year 2003.
The surprise of the short-horizon people (mainly speculators who hoped to sell after a minimum amount of time) from the falling index might lead to a new wave of extensive sell and backing off of the buyers.

Mass Moods

The days come that almost noone believes the trend could change its direction. The media in Bulgaria almost everyday tell us how bad is the health of the stock exchange. It's almost like in the days of euphoria - everybody had their arguments why the prices will continue to grow and now everone could tell you why they should fall.
We should be aware of the signs that tell us the time will change before everybody sees it and moreover, admits it. The timing is the hardest problem. Many people could see the sings and jump in the game. And then the market continues to go his way. After time they could be proven right but till that day they're on the losing side. And sometimes this could be a big risk - depending on the portion of your capital that you've chosen to bet on your understanding of the market. Sometimes on the very lows people that have managed to survive the big crisis could take their biggest loses - wheather they start to be impatient or the pride of "guessing" the crisis makes them more confident with themselves. This risk could be lowered by just waiting the market to completly change /when this is a fact is another question.../ its direction and then jump on. But as market is made by people there is no such moment as the right one for everyone. If everybody waits to see the complete turning who's going to buy so the prices could go higher?...

This is the best part - the different participants take actions in different times. The more condensed their actions are the more sharp and stronger the movements are. Now the movements are undefined with a slight direction downward.... Sometimes there are buy-outs on some positions yet the overall turnover remains low.