Is anybody here basing their stock picking approach on fundamentals? Does anybody look at balance sheets, income statements anymore? Or are most system driven by technicals these days?
The trading game as we have known it, has changed. Fundamentals and technicals meant little last week, it was all about just who was getting their ass kissed by the government and to the tune of how much. Fundamentals and technicals mean NOTHING to those list of stocks that you cannot short which looks to get bigger before it gets smaller. The trading game as it now stands, is all about instinct, and my instinct tells me to be all cash, and wait and see if these looney tunes like Paulson and Bennie with the blessing of DC will continue to use levitation to keep the market up or will the laws of free market gravity ultimately come to pass. I am not being a smart ass, fundamentals nor technicals mean little on a market trading on the heroin of gubmint bailout money. Maybe in month or so, your question can be answered. My only instinct at this point is to short strength for a very few selected stocks, but it has to be a lot of strength and my stop losses will be tight very tight.
No doubt that you are correct. I was really wondering if anybody here was buying stocks for the long term, ignoring the short term fluctuations.
The problem with that is, you have had TWO artificial gap ups, in a period of hours, not even two whole days. Much of those gap ups can be attributed to short covering. Fundamentals are a problem. Things such as employment and real income do not bode well. Not only that but the economic fundamentals that have been pointed to time and time again do not look so hot if they were built on hyper leveraged economic activity. If you got long Thursday morning the Gubmint gave you a gift and I would cash it in now. As far as looking for further upside, I do not see it beyond what may be the next overhyped headline.
you don't want this site for fundamentals. check out www.gurufocus.com that's a great site/forum for fundamental analysis.
FYI, I made a LOT of money last Monday morning, I cashed out in pre-market and I do not regret taking my profits before the market opened on an almost 50 point futures gap down. My profits were not taken so much on technicals nor fundamentals as much as I got the DIRECTION right, I have not made ONE long trade since January. Obviously, there was much money to be made long last week, but I DO NOT understand what would cause someone to go long other than their belief in the Gubmint being Chicken Littles and the Gubmint would prescribe as a remedy what caused the problem in the first place. I have traded for a living for over ten years, and there is nothing so dangerous to a trader than making money more out of accident than design. Last week, the Gubmint gave money to the longs in a number of ways but particularly by banning shorting. That banning shorting gift is a ONE TIME gift believe me.
I see. Well I know quite a few traders who made a lot of money (and I do mean a lot) going short and long, during the same days all last week. All based on technicals. PA doesn't care about fundies, or news, or whether or not the latest rally is "justified" PA is PA.
The last 500 points was DUE to the banning of the shorting of FINANCIALS. How ANYONE can take credit for that in their trading is beyond me. I say that understanding that the Dow did not make a 500 point gain after shorting was banned, but if shorting the financials had not been banned, chances are Friday would have been a down day not an up day. Thursday's rally priced in the bailout, it was the UNPRECEDENTED ban of shorting financials that caught everyone by surprise. I agree lots of money can be made trading volatility. But the BIG MONEY made on Friday was all about the BANNING of shorting which CANNOT be accounted for in any analysis that I know of.