Cults, Caps, Craps! Great post but I don't know if ALL buying is totally short-related. As you suggest, sometimes it doesn't matter if the trade is based purely on oversold conditions or momentum.
The "cult" moniker is perhaps too negative in its connotation for issues with increasing profits and increasing revenues in growing sectors: WFII, NTRO, JNIC, and FNSR to name a few. If shorts and cash-strapped longs have indiscriminately sold the wheat with the chaff, we just have to look more carefully for the wheat (or really, really cheap chaff!).
Buying something, anything, just because it's cheap is a lousy way to invest and only sometimes a successful way to trade. Charts and balance sheets are two of the three pillars of sound investing and trading. The third is money management.
This has been, and will continue to be, a "picker's" market, imo. Technical Analysis helps optimize entry and exit points while money management techniques keep us from becoming wards of the State and eating government cheese!
Thanks for the dose of "rational" exuberance!--Mark-- |
