Yet another market smack down, today. Opened as if it wanted to bounce. Now, down hard with DJIA off over 350, S&P dn 30 and Nasdaq dn 26.
Sure, we're due for a bounce. Have been for several weeks! That's the problem with powerful momentum. Counter-trend moves are few and far between. If we get one? Expect PBs to repeat, for the 4th or 5th time, that we made or tested the bottom and are heading for new highs. Ignore their "noise".
Don't like to ridicule people, but GEEZ! At some point reality has to tip toe into the discussion with a forthright description of what's happening. <The trend is your friend> only if you respect and DON'T fight it.
My read of the current environment? It's a combination of year end tax selling and an institutional portfolio blow out. Relatively rare to have both at once, for a number of reasons we've discussed over the years. When it does happen, it reduces net worth of those heavily long - almost every market sector - very fast. It's OK to be wrong. It happens to every one of us, from time to time. Staying wrong isn't OK. That's why protective sell stops were invented and R used by "buy side" investors and traders, AKA the real professionals
Nuff said,
Iso |
