Sorry about the beating you took, KG. FWIW (not much), here is what I have been doing. I only buy on a bloodbath day, like today. I bought NT and JDSU at 48 and 71, and QQQ Dec 79 calls at around 6. I also bought ERICY after it got killed, at around 12. I am down a bit on most of these, but that's ok. I use tight stops, 10% or so below my price, because any stock can be taken down 50% at any time, that is the kind of market we are in. Not that stops help much when the MMs gap you down 25%-50% overnight, but it's better than nothing.
My plan is to sell on DCBs, or any sign of strength, gladly taking 10% profits. If I think a rally has legs, I will let it go for 25%, if possible, but that is risky. Sometimes I don't get a chance, and have to take a loss, but I limit my losses to 5% whenever possible. If and when a momo market returns, I may re-evaluate, but this market is not a BTD market, it will kill you if you do that and don't have the money or patience to wait for years.
The alternative to this strategy (unless you are truly LTBH) is to go short or buy puts, but you can get killed even worse with that strategy, given the explosive bear rallies we have.
IMHO, the economy is heading for a recession, and the Fed is caught between a rock and a hard place. If they head off the recession, they refuel the economy and bring back their inflation phantoms. If they keep raising, the world goes into a depression. So my bet is they do nothing. In the meantime, the market is being played like a fiddle by the houses, the hedges, and FUD is everywhere. |
