Ted, Re: "I don't know how you stop this self feeding activity without an intervention of some sort."
I guess it stops when people are finished selling their holdings at a lower price, and that requires a kind of capitulation. When the statistics are swayed in the other direction; that is, when there are fewer sellers than buyers, then we will have hit the bottom. Unfortunately, too many people are resiliently holding on to their shares, out of some far fetched hope that a bull market will reform itself from the chaos. I know that I'm one of those people that can't bring themselves to sell my holdings at an incredible loss - I'm sure there are more. Meanwhile, as the market trickles towards liquidation, we get day after day of losses, and no bottom in sight. I think that eventually, there has to be some kind of inflection point, but I don't know where it is. I know that I am finished buying or selling at this point in time. Either has its drawbacks in this environment. The best that I can hope for is that the capitulation happens quickly. It didn't today, but there is plenty of time, IMO. Watch as people get more anxious when the dow slips below 7000, or the Nas hits 1200.
wbmw |
