Hi Brandon; Didn't mean to suggest I was bargain hunting, what I was trying to say is that daytraders shouldn't assume that the long bull move is over.
To me, the short definition of a trader is someone who buys stock and executes a reasonably tight stop loss. I'll leave bargain hunting for the investors, if I bargain hunt, I'm sure going to keep a tight stop loss.
A couple weeks ago, I bought MSFT at 65 15/16 and make a couple points over a couple of days. ( #reply-13488649 ). But note that I did admit to "biting my nails" over the trade. I try to avoid overnights except on obvious bargains, and I don't think MSFT was an obvious bargain then, or now. I don't see any of the market big caps as being great bargains right now. But even the tech market is still very playable to the upside, (as well as the down), as today's remarkable action demonstrated.
In the long run, the fantasy bubble market is dead, but then again, so are we. (Paraphrasing Keynes.)
I'm having trouble precisely expressing what I am trying to describe. I have seen so many people predicting the next big move, but big moves are much more rare than people's predictions of them.
The best way I have of expressing this is to say that it is true that markets do tend to revert to means. But they revert to shorter term means faster than they revert to longer term means. I have absolutely no doubt whatsoever that this bull market will end with the mother of all bear markets, but I know that that big bear market is not going to happen over a time period of 72 hours. For this reason, I am perfectly content (modulo the nail biting) to hold MSFT for that kind of time period.
On the other hand, if we have a 5-day down move in the market, followed by a flat or slightly up day, I would be very inclined to believe that the market will go up over the following 2 or 3 days.
This is not to say that the market went up today because it was cheap. The market still has massive amounts of drop available before it even reaches its 100 year valuation average, much less penetrates it to form a real bear market bottom. But for a trader holding for a few days, attempting to time those generation long moves is suicide.
In short, this is the "DAYTRADING Fundamentals" thread, not the "Buy and Hold" thread. I have no doubt at all that the majority of current buy and hold investors are going to say bye bye to a lot of their net worth. It's just that I'm trading on too short a time frame to take advantage of that fact.
-- Carl |
