We understand that, but the Mom and pop investors who were putting part of their paychecks into mutual funds and their 401ks do NOT. They are the ones losing confidence and selling, near the bottom I'm sure.
But as traders we have to take advantage of the sentiment, and the trend! It is our job! So until this accounting mess goes away, we have to go with the trend.
I used to go only long, and sit out times like these, usually underwater. And wait for recovery, and then miss the profitable ride back up. I didn't watch indexes then, just the stocks and reversals came without warning. I finally started studying the indexes, and learned to short, thanks to Jerry, and to see that backside bounces to overhead EMAs are screaming short me!
Until they break above, HOLD and the trend changes.
Otherwise they are just traps for going long, when they are perfect setups to go short.
Everything is below EMAs now, and the indexes are below REALLY important ones on longer term. So what this is looking like the past few months is a wicked bear rally that fooled many. Another trap for little guys, as big guys have been unloading for weeks now, months actually since that December top. And until the trend changes, I can only see short. Even short rallies are setups lately - not real reversals. Some really good traders thought 1/30 was the low, and got stopped out yesterday...
If none of these guys goes to jail, Bush can probably kiss another term goodbye. |
