...I can't believe the pessimism 10% from a top....There are so many amateurs shorting these markets right now.....IT's never that easy, as is it's never that easy to buy a correction...
I can say that this drop is alot slower than the one we had on Feb 27th and the one that followed on Aug 16th. This has a been a steady drop over the past 4-6 weeks.
What is your source? By 'amateurs' are you referring to everybody here on ET? I would say the real amateurs are not traders. I would say that most are buying the dips.
Odd lot shorters aren't too aggressive right now http://www.sentimentrader.com/subscriber/charts/ODD_LOT_SHORTS.htm
Not ET amateurs...In general, listen to practically every Trading show on the radio or TV and all the callers are asking about going SHORT....These are the same folks who will be sitting around Thanksgiving dinner telling their families how much money they made SHORTING the market on the recent news... It's never that easy and they will pop this thing bigtime to put a hurting on the amateurs.
We intraday traders, don't care which direction the market moves, and we are long or short accordingly. We can be optimistic or pessimistic re the market direction (at present i'm pessimistic) as we see fit, so long as we don't let our intermediate term bias affect our day to day trading. Buy and hold investors, should be concerned here, as a 10% drop is a quite large "correction" as you put it, and the market is threatening to do more than this to the down side. I would not recommend that long-only investors buy these "dips". Because of the negative economic forecast, and now, negative news, they should have been in cash (which should be hedged against inflation in some way), bonds, dividend-paying safe harbor stocks, hard assets or their equivalent, starting shortly after the market's failed attempt to breach the old high. They should not be in a rush to go back in. Those with patience will be rewarded with wonderful buying opportunities, particularly in the financial sector. I believe dollar cost averaging leads to average results. P.S. Those who want to short with relative safety from being squeezed could consider buying deep in the money puts far out. But remember, bulls die hard.