Kha, I would NOT be on the sidelines with trading capital, and all the many high flyers that are still around, but I would sit on the sidelines as far as "investing" is concerned. Whatever I take home at night is usually a 'hit 'n run' overnight trade to be sold the next morning or after a few hours. I wouldn't want to miss even a 2 hour rally or shorting a Pike's peak.
What is happening is simply that everyone is attracted to the BLIMPS so on any rally they move up grandly, in some cases up to 15%. Most traders already know they are overpriced, but popular so they get bought for the 'trade' value, go up, then sucker in the investors, then traders sell and the stock moves down. Investors are waiting for the 'all clear' sign and traders are very willing to give them the 'false alarm' then get out.
Of course one day there will be a real 'all clear' alert but by then what will happen is simply the 'stops' won't go off like in the energy sector and one day will lead to the next and you'll find yourself holding onto those stocks.
Why are the oil service, gas, chemical stocks still moving up? They are not as popular, don't usually make massive one day gains, have normal multiples so there is no hullabaloo about them. Investors get in, stay in and mostly traders just stay away.
I have noticed on many big gains the big block trades were 0 to maybe 8 or 9. yet the stock moves up into double digit gains. I've seen that with NVDA, NEWP, and most of the net stocks except YHOO, EBAY etc. |
