Warning: Soapbox opinions below...
From my post dated March 3rd:
<<<Seriously considering going short the QQQ on or about March 24th. Many people anticipating this selloff, and as such... I think it might occur approx a week earlier... as everyone tries to beat the other to the exit door. Lots of selling to be done in order to cover short term cap gains taxes IMO.>>>
No, I didn't have the conviction to go ahead and trade that plan... I'm just not comfortable with shorting yet, but I did liquidate... and the MSFT uncertainly is compounding the effects of this correction.
FWIW, as I have said on a few occasions... I believe the Naz will bottom near 3750 or so sometime in April (with profitable bounces for the extremely savvy trader). There is support at that level that was established in January. I would predict the absolute low on the Naz, barring any China devaluation, world catastrophe, or other major fallout... to be its 200 dma.
William, I took particular note of your comments a few months back regarding the new investor's perception that a bull market advances in a strongly linear fashion, and that it was an entirely flawed notion.
That is my primary reasoning for being so bearish on the Nasdaq short term. I am a long term bull, but when you have mega advances like the ones that have occurred in that index since the October low, you need more than a 10% correction for it to be healthy.
That is the new market paradigm IMO, and is a direct result of exponential gains; volatility that which has never been conceived of before by traditional economists.
I predicted this last year before anybody on Rande's thread knew me. I believe my becoming involved with the markets at a young age allows for a uniquely fresh macro perspective (naive as it may be). In other words, the volatility doesn't bother me like it has that fellow who recently closed down his 'old economy' mutual fund in shock to the ways of today's markets... I've come to accept it as reality. Really helps me keep a level-headed grip and remain objective.
I suggest that, to a certain extent, anyone who has years of experience in the markets tries to somewhat displace themselves from the old way of thinking with regards to valuations and the like. We need to adjust our strategies as the marketplace evolves... look no further than Warren Buffet for a prime example of how important this is.
Anyway, just some thoughts on a day that there is a lot of pain in what can be a very confusing environment... for both new and experienced investors.
Dave
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