I agree with your assessment of the correct strategy to follow regarding the Energy Services fund. If you are a long term holder of this fund, perhaps as far back as early May when it gave its last definitive buy signal, selling this past Monday or Tuesday, to lock in a 50-60 % gain, was a good strategic move since the fund did break down through support into technical sell territory. On the other hand, if you bought the fund within the last month or so, and are sitting on a loss, the historical tendencies of this sector pretty much demands that you hold on through its latest decline, which was just about the same as its drop last January before yesterday's move up. After all, why sell and take a 8-15 percent loss, then try to figure out what other fund to invest in that will make up the loss as quickly as Energy Services will once it does turn around. Fundamentally, there is nothing wrong with this sector, and you can be sure that brokerage firms have been getting their largest customers to keep buying these stocks as they have been falling, in advance of the inevitable glowing reviews and upgrades that will follow. It is a terrific game to play, of course, and we bourgeoises must be satisfied with the dregs while the power brokers scoop up the really big returns. I'm looking for a continuation of yesterday's move, and the establishment of a technical divergence at the bottom, to put more money in and ride the fund back up. The recent selling is similar to a patient whose jugular has been sliced open. The fund has been bleeding severly, the first thing to do is stop the bleeding, save the patient, then begin the recovery process which may be a long or quick one, depending upon the health of the patient. Some of this was accomplished yesterday, now we must look out in case it springs a leak elsewhere and needs to be resuccitated once again. Keep the faith.
Bernie |
