The Market Feels Like An Empty Void
Please let me know if you share this feeling! I have been searching for possible buys rather diligently and yet, I have found none. Traditionally, oversold conditions usually produce high probability trade setups that one could go long. So far, no such luck. Am I just simply being impatient? Perhaps I am. It usually does take a few days for quality setups to appear. For now I have only found one interesting stock. I will let you know more about it later on. For now it is overextended and not at a good buy point.
posted by Nick M. @ 12:07 PM
6 Comments:
Nick,
You are certainly not alone. I have a huge buy list but I do not see the price is right yet. I still see further correction, not drastic but seems like the economic and corporate data will keep things extremely bearish for 2008. My buys are set for quality names such as COST, WMT, GE, CVS and some "quality speculatives" such as SQNM, GXDX, IPI, etc. Not doing much at the moment and about 70% cash (still getting creamed daily).
There are NO good longs that have set up from nice long bases. The place to be right now is in cash, or short. I've had some success shorting AAPL, RIMM, MOS, FSLR and ISRG starting September 5th (just before everything started to fall apart).
Andy,
I am also on the lookout for stocks such as SQNM and GXDX. These types of stocks usually do well in this kind of environment but it doesn't seem like the case this time around. I'm mostly in cash right now as well. Guess we'll have to wait a bit longer before we get a real bounce. Hopefully we'll just retest last weeks low. That should give us another decent bounce.
Rocoach,
Even now shorting seems dangerous since we are still lingering in oversold territory. But I agree, the short side is the way to have gone for the past few months. I started shorting very early (July 2007)and have already covered my positions over 6 months ago. Now I can't find anything to short that isn't overextended to the downside. Even the bear/inverse ETFs seem to be overbought.
The oversold conditions are unlike any others in the history of stockmarket. For one, Hedgefund redemptions. For Two, mutual fund redemptions , For three, Yen cararry trade redemmptions.. It has become a whirlphool of redemptions with no end in the sight. The thing is there are no BUYERS. If hedge funds liquidate, if mutual funds liquidate, if foreign investros liquidate and loose confidence in our markets.. who else is left to BUY? None. Market is and will be dead for while.
Yre,
You are absolutely correct. That is the main problem. Todays market turmoil is unprecedented. We haven't experienced anything like it. Each downturn is different and is caused by different factors. It will remain to be seen what factors will help stabilize the markets. We need new (and brave) companies and technology to emerge. As long as human beings continue to be creative and imaginative problem solvers, there will always be some new technology out on the market which will help drive the markets higher. I'm thinking that the Dow will see at least 5,000 by next year.
Post a Comment
Subscribe to Post Comments [Atom]
<< Home