Just about everyone is saying, "sell into rallies, especially for the techs". I had the business news on in the background all day, and I must have heard variations on that phrase a half dozen times. This is going to put a cap on any rally. I'm thinking we get a rally in the Nasdaq in March, but it fades below the January peak (2900). OTOH, if we take out the January high, or if AMAT closes above 50, maybe the bottom is in. A mountain of scared money is on the sidelines, waiting till there are signs of a bottom (in the stock market or the economy), and that money will be jumping into stocks like AMAT, EMC, TXN, maybe even CSCO. I have no idea where the bottom is (although that doesn't keep me from posting lots of guesses), but the rally off the final bottom is going to be breathtaking. Money into stock mutual funds (especially tech funds) has almost totally shut down. On the rally off the final bottom, we'll see 10s of Billions/month flow into those funds. Nasdaq up 40% in 2-3 months is not unlikely.
At best virtual trading gives you virtual profits. Doesn't feel the same, does it? I don't think it's useful, even as a training exercise, because people act differently when real money is at stake. A better idea is to set a small part of your portfolio aside as "mad money", and try out outrageous and crazy things with it, dangerous and exciting things. If you lose it all, well, consider it paying for entertainment. Keeps you occupied, off the streets and out of trouble, while you wait for LTB&H (where most of the money stays) to do what it's supposed to do. |
