Trader J: Broader Market
I think the market is a giant game of chicken right now. We've got prices coming down on light volume and an immense amount of cash on the sidelines, waiting to enter. My gut feeling is that the pros would like to take the market down further; but if the individual traders start buying with conviction, the pros will jump on the bandwagon. Ironically, I think, the pros and individuals are each looking to the other for leadership.
I think a lot of us (pros and individuals) felt that the DELL effect would be much more extreme, and that this would give us the break to the downside that would allow us to start buying again. I certainly thought we were going to tank hard yesterday. As it is, we're still waiting for the decisive sign -- which I still think will be a hard turn south, followed shortly thereafter by a substantial buy-in.
What's most astonishing to me about these last couple of weeks is that the "value" stocks haven't seen any buying, except for Buffett. This market should have given us some re-allocation from growth to value, but that doesn't seem to have happened. I'm puzzled by the fact that the money seems limited to the Nifty Fifty (and Nets), on one hand, or cash and bonds, on the other. Value stocks would have seemed like the obvious middle ground, but they've been passed over.
Until we see some conviction, I'm treating rallies like this morning as bear traps. I'm taking a few very conservative positions, but am making a priority of capital preservation. I'm especially trying to avoid any temptation to overtrade; this doesn't feel like the time to try to be a hero.
Good luck to all! |
