REMEMBER - If most think the BEAR MARKET is dead and that it means clear sailing, that's probably too simplistic.
Most of the time contrarian viewpoints (e.g. having a high put/call ratio being a sign we are near a bottom) work out well. The Market never lets you get comfortable and like someone said, can change on a dime. Up or down trends lasting more than a few days may be rare over the next few months. Based overall on earnings, we are now probably almost fairly valued in the NASDAQ at this point in time, so again, the real issue is psychology and whether the Market decides to look ahead to better future earnings.
That is not to say that some individual stocks are not undervalued or overvalued, you understand, but the NASDAQ is probably fundamentally about where it should be. THE DJIA is probably still a little undervalued, but not by much.
IMHO, of course, from what I have read or heard.
The main lesson is ---- do NOT get too comfortable and do not force a trade based on emotion. I think most successful traders always play the REWARD TO RISK game.
That is why I bought EMLX at $12-13 a couple weeks ago (now $30) and suggested buying AMCC at $11-12 (now $29). The R to R was very good at that time. Buy when "blood is in the streets", right? It takes less guts than you think, once you do it a few times.
Now, the odds are getting closer to the shorting side but the emotional panic buying may not yet be over. |
