In February, everyone seemed very scared of the sudden drop which seems natural. Some folks even erected blogs dedicated to walking people through the drop and recovery. I remember reading www.traderfeed.blogspot.com where Brett passionately defended the market. Now the indexes are dropping once again and there seems to be no fear in the air...as if this drop is no big deal. From what I am looking at, the current drop might result in a panic or crash. It might even result in a serious disturbance to the overall uptrend where the SPX will retreat to 1130. Where is the passionate defenses of the market? It was the fear last time that made the market stabilize. Now that everyone is more confident and fears not then I am certain the indexes will grind to new surprising lows the like that no one will truly suspect or believe.
My only fear is that the vix will go back down to 10 and the mkt will hardly move. Vix over 20 is grrreat!!!
I want to clarify what I mean by "fear". I dont mean the vix or put/call ratio, but what is the general subjective feelings among traders as perceived through interactions, message boards, blogs, etc...
Scared? Are you joking? I love these markets, both as a trader (especially as a trader) AND as an investor. I've been in cash since the market hit 1540 the first time while waiting for the carry-trade-real- estate-credit-crunch-Greenspan-dollar-George-Bush-"Bring'em-On"-Idiot--President disaster to hit to create investment opportunity. It's definitely not time to rush back into the market as an investor, but we will get to that point someday, and i'll be there, in the meantime i'll take it to the bank on the way down. So thank you Mr. Greenspan and thank you Mr. Bush, even though you've just screwed over mom and pop's 401K, because you've made me a lot of money this week and created a lot of opportunity to make more money in the future. (Or course i'm overlooking the fact that the Bush dollars i'll be making will be largely worthless. It costs one hell of a lot of money to kill people these days!)
Since the great majority of traders are wrong, "losers" if you will, it really shouldnt matter what the majority on message boards think or feel about the recent action. The only thing I personally concern myself with is what do "I" see. And what I see is greatly increased intraday ranges with a lot more profit potential due to increased volitilty. Obviously one cannot profit if things dont move so of course I see this recent action as good for intraday traders. So hence, no fear
If your a trader you shouldn't be too worry about which direction the market goes (up or down). However, if the price declines doesn't allow you trading opportunities based upon your trading strategy... Step aside and relax until things are bullish again from a short term perspective (day trading). Mark
My opinion is that there is no such thing as "investing" nowadays. There is only trading. "Investing", for myself, means that I can take a basket of 5-10 different stocks and dollar cost average into them over an extended length of time (5 or more years). At the end of the extended period of time, I should then be able to take a look and find that my investment vehicle has greatly appreciated. Does that take place today? Honestly, I dont think so. There are no stocks, save for a select few, where you can feel safe holding them for 5-10 years. For example, Pfizer. A great traditional large US company that did well during the 80s-90s. Now it just keeps going down year after year and who knows where the end will be. The only way to buy/hold and feel safe is through an ETF. Even then, you still wonder if it will truly go up. Therefore, the bulk of today's market is indeed trading whether it be for a few seconds or a handful of months. My style doesnt involve holding (or shorting) stocks/options for a few minutes or seconds, but over a period ranging from a day to maybe a few months. Basically, a swing trade. So sentiment is important to myself.
reminds me of may/june 2006. I think the dow is ready for something under 13,000 Did anyone see cnbc this morning, that guy jack was on and he said that he sees DOW 15k in the next 6 months.