T2,
Both. Daytraders are getting whacked, too. I trade this market and it's now DAMN hard. It's trend is sometimes only 10 minutes, barely enough time to set a pattern.
There "rumbling" type of rumors now about some hedge funds, but it's probably just to garner some sympathy that AG will again lower to help them. Not so this time. Can't cry wolf again!
We will not have a huge rally. This damage has to mend.
Confidence has to return slowly so that people reverse the psychology of the last 2 weeks. Many lasting impressions were made this week. Many who now have "hard" losses, and paper ones as well. People won't be as reckless with their investments, and overall, that's probably a good thing.
Margin should be used at the bottoms, sure. But where is that bottom? Let's say I thought it might be 400 point higher. If I started with margin then, I'd be getting calls NOW. So that doesn't work either. You never know where the bottom is. Many people say that 3500 is the 200 day MA, and if we don't hold that we go back to 2800 (filling many gaps along the way).
3 weeks ago, I mentioned that we could go back to 4000 when we were at 4800. Someone replied (insinuating I was nuts..), and we all laughed that the NAZ could go to 3000, then 2000, then 1000, and then go negative. Many people didn't think it would go to 4K, but it's now lower. I think it's going even lower. BWDIK.
I was buying and getting burned on the way down to here. This is tough man. Buy the dip ISN'T WORKING right now!!
PMCS was at 255 on 3/10. One month later it's 114. Yikes.
Same is true for many QUALITY companies with EARNINGS. Something fundamental is happening here for the moment. You can fight it and lose money, or preserve you capital for the REAL TURN, and then do your bottom fishing.
I'm not going to be the hero. I tried buying the dip all week, and then bailed on many of those tries. Some with gains,but many with losses. It's called catching the falling knife. Small cuts, no major vessels.
Institutions are raising money and instructing their traders to do the same at the expense of the pavlovian public that will attempt to once again BUY THE DIP - because it WORKED for the last 6 years!.
However, buy the dip will work again!! BUT I'm taking my queue from their advise and lead, for the time being.
The dip's not yet buyable for good. IMHO. It's tradeable, but NOT buyable.
Steve |
