Everywhere I look on the internet everyone is convincingly pessimistic about the market. I think most people are just not used to seeing two huge down days in the market. But to conclude that Monday will be an automatic bounce back is a little dangerous. More and more people are going back to cash, which means more profit taking and more panic selling. I sure hope there is a rebound soon though, because all major indices are falling apart. Leavitt Brother’s Chartspeak has a clear explaination of these indices breaking through support.
This will be very interesting week, since now I have to flip my position on most of the stocks I’ve been watching. I think for now, a good way to play the market is to look for stock charts that look parabolic and start shorting them. These overbought stocks are usually the first to fall. Either that, or just stay on the side…. “Sell in May, go away.”
In the meantime, I’ll be searching for some shortable stocks. The basic materials industry seems like a great place to start. Make that, basic materials + Cramer recommended.
Joined Jul 30, 2008
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