AA, I agree with you, parabolic declines rarely get resolved with wallowing bottoms, once the sellers are gone, there is nothing to stop the hot air balloon from rising, I think a rally with an advance between that of last April and last September (between 30% to 50%) is becoming more and more plausible. Of course, jumping in after the trend has proven a change in direction is safer, but often, one misses 30% of the advance in the first week, before it is evident the trend actually changed (it may start as one day wonders like those "hugging" the 4th of July, or the sudden move from 1315 to 1425 on the 15th, everyone would want to have more proof that a new trend is in place (and thus "demand" a close above 1425), that will be a cool 200 naz points from the bottom. Since I agree with you that this event is of the 2 sigma type (I would say more like a 4 sigma), I chose to get in and when stops are hit change horses to stronger stocks, in some events, I have even relaxed some stops, to give the stock and the market another chance (sometimes, quite costly...).
Zeev |
