More than ever I must caution folks

Stop looking at crap you've looked at for the past 10-100 years. Everyone from value investors to sentiment traders to whatever trader knows this is a bottom. The big problem is EVERYONE IS LONG BECAUSE OF IT. I see absolutely zero fear. I am not referring to the VIX, I am referring to raw emotion and chatter here. I've seen far worse fear at other bottoms and there is NONE HERE. I am looking for signs of it everywhere but all I see is everyone saying BUY BUY BUY. It looks pretty bad out there, but IT CAN GET WORSE. Do not delude yourself based on swiggly crap on a chart or polls or what have you. Ask your neighbor, ask your friend, parents, etc. What are they doing? The answer will surprise you.

That's the point I made a week or so back when I playfully opined:
"We are in uncharted waters...and I'm looking at charts."

This is like surfing in a hurricane.
The waves are gnarley, if they don't kill you.

Edited by Rogerdodger, 23 October 2008 - 09:15 PM.

Thought I would mention that my charts are working just as they always have. Nothing has changed at all except that we are now more volatile. Now, I must also say that I just look at the chart...price action. I don't use oscillators, stochastics, RSI, MACD, or any of the other canned indicators that I see all the time. Maybe those are doing something different. The charts are just as they always were. IT

Its not like I'm not trading.. I am with small amounts and very quickly. IT traders or those that can't trade futures are screwed in this environment.

Nothing has changed at all except that we are now more volatile.

Exactly.
I think that was Yuri's thought in his thread below.

. Ask your neighbor, ask your friend, parents, etc. What are they doing? The answer will surprise you.

my nextdoor neighbor had a bank check bounce last week on her credit line and she found out after the fact that her credit line has been shut down. she sold "the rest" of her jewellry and borrowed money from her SO's mom to cover the check.

she bought the house at the top of the market and her mortgage will reset soon. she also owns another house in new mexico. if the house in NM sold today for the asking price she'd walk with $20k after a decade of ownership. but there's little interest in the house and it's not even rented now.

her monthly nut is $10k and growing. hate to see her lose the house because she's a great neighbor ........

ed rader

Edited by ed rader, 23 October 2008 - 09:31 PM.

Stop looking at crap you've looked at for the past 10-100 years.

Everyone from value investors to sentiment traders to whatever trader knows this is a bottom.

The big problem is EVERYONE IS LONG BECAUSE OF IT. I see absolutely zero fear. I am not referring to the VIX, I am referring to raw emotion and chatter here.

I've seen far worse fear at other bottoms and there is NONE HERE. I am looking for signs of it everywhere but all I see is everyone saying BUY BUY BUY.

It looks pretty bad out there, but IT CAN GET WORSE. Do not delude yourself based on swiggly crap on a chart or polls or what have you. Ask your neighbor, ask your friend, parents, etc. What are they doing? The answer will surprise you.

Actually, this market is just behaving fine if you follow the first principles. Buy oversold and sell overbought conditions. How you define what is overbought and oversold has not changed much - just the magnitude of the oscillations has increased. What used to be a 50 pt bounce is now 200-300 pt bounce. Projection targets are also working good. Just reduce your position size, be nimble and this is a great market to trade in either direction.

I'm not talking about day trading folks. Thats what I'm doing. Normally I'm a position trader. Day traders will do just fine as long as they respect stops.

I'm not talking about day trading folks. Thats what I'm doing. Normally I'm a position trader.

Day traders will do just fine as long as they respect stops.

Yeah, day trading has been profitable. One last point on short term swing trading - except on the 10/1 to 10/10 leg down, 3-4 day cycles are working as well.

Agreed I know some folks who dont trade who are trying to buy the bottom cuz they heard Buffet say he is buying. They will end up losing money cuz that is there purpose. That is the only thing that is holding up the market here. Transfer of wealth from the weak to the strong.