After a period of global stock market fear, it's a shock to my system once the panic suddenly eases.
Its hard for me to know whether a rise in the stock market is the start of a short lived rally or the start of something bigger.
To help me assess the market one of the first things I like to look at is a CHART.
I like to analyse charts on two different levels.
a) I look at the long term chart (eg daily, weekly).
b) I look at the short term chart (eg 30mins, 1 hour).
I then have to decide for myself the next "check point" I believe the index/stock could reach based on the direction it's heading towards.
Analysing charts helps me to determine how long a trend may last for if the momentum is sustained.
I try to decide from this if the trend may be short lived or long lived.
Please let me know how you assess whether a rally is short lived or the start of something bigger.