Markets are Trying to Rebound
Posted on December 18, 2007
Filed Under Market Speculator |
The stock market has suffered a sizeable downturn over the last phew trading sessions. Many investors are now on the hunt for bargains also known as Bottom Fishers. Although we are bouncing off an extreme oversold condition there are very few if any so “called” bargains. Bottom fishing is an extremely dangerous way to invest, we haven’t seen a true bottom in the market yet. Do not feel the need to jump into the market because prices have come in a bit.
My game plan is quite simple, stay in a few stocks that are holding support and cash. The market is not presenting a pretty picture for the long side. Our leaders: BIDU, AAPL, GOOG have started to show some sizeable cracks in their armor. Coupled with the market action as of late, I just do not see any edge to the upside.
Another point I’d like to make is the VIX. It did not confirm a bottom back in November, in fact it failed to show any level of fear in the market. During Monday’s trade the VIX had a terrible time gaining traction to the upside. There needs to be more fear when the market sells off and we haven’t seen that yet. Its mostly due to our lovely bottom feeders who are anxiously awaiting a large bounce to the upside.
Its important to trade a reasonable plan, make sure you cut those losses short!
Market Speculator
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