What I think about the market
By Yaser Anwar, CSC of Equity Investment Ideas
The market's been doing so poorly over the past few weeks that many people have been afraid to get out there, and the recent rally hasn't yet turned into a recovery to quell the investors' fears.
They think that this is the time to step back and let others fight it out while they wait. Maybe they've been burned in the past when the bottom fell out of the market, maybe they just don't know how to trade when the market's going down, or maybe they think they're protecting their investments.
But the problem with this mindset is simple: When do you start trading again? Wait until the market hits bottom, then expect to get a quick ride back up? Frankly, the chances of the market getting back to those record highs anytime soon is slim - and when we do start moving back up steadily, it'll be slow and tentative as investors start to feel the market back out.
The truth is, money is made by the Traders when the market is making big moves, not by the investors when it's slowly, steadily crawling along. The key is predicting big moves during volatile markets, where there's a large volume of trading, and right now there's a LOT of volatility - a lot of market movement toward the downside, as investors' fear causes them to continue to dump stocks, and then toward the upside as it rallies before falling again.
The Short interest has been going up for the fourth straight month to to 9.087 billion shares from 8.613 in the previous month.
http://www.equityinvestmentideas.blogspot.com/
The market's been doing so poorly over the past few weeks that many people have been afraid to get out there, and the recent rally hasn't yet turned into a recovery to quell the investors' fears.
They think that this is the time to step back and let others fight it out while they wait. Maybe they've been burned in the past when the bottom fell out of the market, maybe they just don't know how to trade when the market's going down, or maybe they think they're protecting their investments.
But the problem with this mindset is simple: When do you start trading again? Wait until the market hits bottom, then expect to get a quick ride back up? Frankly, the chances of the market getting back to those record highs anytime soon is slim - and when we do start moving back up steadily, it'll be slow and tentative as investors start to feel the market back out.
The truth is, money is made by the Traders when the market is making big moves, not by the investors when it's slowly, steadily crawling along. The key is predicting big moves during volatile markets, where there's a large volume of trading, and right now there's a LOT of volatility - a lot of market movement toward the downside, as investors' fear causes them to continue to dump stocks, and then toward the upside as it rallies before falling again.
The Short interest has been going up for the fourth straight month to to 9.087 billion shares from 8.613 in the previous month.
http://www.equityinvestmentideas.blogspot.com/
posted by douglas mcintyre at 8:53 AM
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