Wow! Things can change and change quickly in this wild world of the markets. I hope that all of you who were long had stops in place. My stops all triggered, and I am now out of my trades. The markets I held are still fundamentally strong, so I am now looking to buy them back, if they drop low enough to make a decent profit on the comeback.
The reason I am willing to wait a bit is that I think that this downturn might just go on for a bit, even though today’s market is an over reaction on light volume and relatively little short selling. Money seems to be flowing to the sidelines, as opposed to a bet on the market dropping significantly. This tells me that investors are doing exactly what I am doing, which is waiting to buy on weakness in a bull market.
The drag of the fiscal problems in the euro zone will hand around for a while, but it appears that the affect will be less and less over time. The resolution will come, and probably will not be pretty, but it will come. When that happens, the market will return to its slow but steady uphill climb because we are in a steady recovery. Check out the following commentary for a quick highlight of this week’s good news.
May 4: Factory Orders Rise – Economic Highlights
by ZacksResearch on May 4, 2010
If I am wrong about this, my trades stopped out with profit, so while I am waiting just a bit, I am looking for trades, as the work of trading is not just trading; it is analyzing conditions and looking for opportunity.
Remember, there is always a trade out there, even if it is different from the one you have in mind today. Be patient and be willing to let go of any trade that out runs you. Don’t chase … Just watch, analyze, and pounce when the market settles down.
Trade in the day; invest in your life …
