When the markets are in violent smack-down mode, I seldom write many words. I usually post charts that tell the story. That’s because I’m usually warning about the dangers of an impending market reversal. Those who have been in the business longer than 3 years know that the higher the price of a stock, the riskier it becomes–absent news. Many newcomers truly believe that the more a stock travels in a given direction, the easier it is. Lemme tell you; when it gets too easy you must be prepared for the violent smack down.
We’ve watched and warned that the tone and tenor of the market has changed with government hosility. We’ve watched the Eurozone burn. Yet the wonder of the markets continued. Watching and listening to the market lie and being blind to the truth is the cardinal sin of market participants. It is OK to miss a little, to leave something on the table. There will always be another opportunity around the corner.
I say this because whether you are a day trader or a long-term investor, I don’t want to see you succumb to the repeted and classic mistake of the Siren’s Song–especially after a 100% rally. I know that following the trend is your mantra, but it is usually wise to sell when its easy and to buy when its difficult.
Scott the Worrier has spoken!
Today’s market came close to testing the 1150 area of the primary breakout. While the market’s were down 2.5% yesterday, the vast majority of long investor’s lost 5% or more. In one day. Many, many stocks are pulling back to test their latest primary breakouts. The rule of thumb is easy. Look at your stock. Look at the latest breakout. That will be where the stock pulls back to and should be bought.
But there are still fires burning. Being a spit away from 11000 and 1200 makes for a continued risky environ. We are in the process of breaking the back of investor and trader complacency. Don’t get nervous and jerky. Know that this is a market inevitability and get ready, but have patience…
ADDENDUM:
This negative action comes almost exactly one month after the FED’s buying of MBS’s ended. Your 401k money extended the firepower, but it all fell apart exactly ONE DAY AFTER tax day, after the 401k money finished flowing. That was the beginning of the end even though there was one more little shot higher to the marginal new high. That marginal high was exactly 100 Dow points. HAH!
Please don’t listen to the majoriy of the assholes on TV. They are simply lemmings without an original thought between them. I know from what I speak… And as far as Peter Schiff is concerned, do your homework before you believe a perma-bull or a perma-bear…
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very good piece….but both you and the Fly today picks out that 3 year time period…..Next Month makes 3rd year for me, can’t wait.
Girls mature faster than boys…
LoL She had her “stock market bat mitzvah” before the boys did.
Scott and ChessNwine….Thank You, that comment meant a lot to me Scott, in fact I am printing it out …and Chess, you know I think girls can make their real Bat Mitzvahs at 12 I think……..So TODAY is my official Stock Market Bat Mitzvah I believe….
MAZEL TOV!
Thank You Scott…..shalom
congrats on making it this long, its all downhill from here…11 years ago I got into the market at the age of 17, a lot of ups and downs since then but after year 7 the ups became so much more frequent and the downs, well, they started to deminish with proper risk and money management
GetGroup, You are sooooo lucky to be doing it for 11 years…….I so totally love it all so much, this is my passion in life, I wish I found it 11 years ago….So far this has been an AMAZING journey for me, I keep pinching myself on all the great roads I have travelled down so far in this short amount of time…so many great people that I have met via the net….so many GREAT stories…like my Stock Bat Mitzvah today.
The best thing to be is Perma-right
That is certainly a high expectation! And an impossible one at that.
Winners will come. It is how you manage your losses that count…
you said it my friend, people get hung up on the next big win when really they should spend their time avoiding the next big loss. I’m sure I could elaborate on my idea of rightness(keeping winners and shedding losers) and have my phrase make much more of an impact.
well said Scott.
Some really good stuff in there
and thanks for my nickname! It’ll probably stick…
Nymph,
Very touching story but STFU
The stock market is not meant to be a life journey. The stock market is about porches, cocaine and banging hot models
I suggest you take up pottery or get in the funnel
Gosh. Don’t ruin her that fast. Let it happen naturally, through losses…
Area51..Nope it’s my life journey….go play with your models on cocaine…..I will just keep learning when your screwing the porches. Scott, don’t worry, there is no possible way to ruin the nymph….I can take every hit in the world and still be enjoying every moment of this…
Area51….roflol….when I read your post I thought you misspelled pooches as in screwing one. But, I just realized you probably misspelled Porsche……you totally amuse me…..btw reading a great speech by Charlie D who past away…you don’t want to be in the( funnel) cloud….you seek to be in the center of the storm…..fwiw.
Scott – Great post, ‘nuf said.
@Nymph – Enjoy it but try to avoid the hits. Every trader has a finite amount of them.
Thanks Yogi….
Nymph,
I didn’t say what I said to hurt your feelings .
The market is a fucking battlefield where men lose their lives. Sort of like Vietnam
Srsly buy a cook book and entertain yourself other ways. Good luck
Scott the Warrior….I like it…
you can spell it worrier if you want, but it all falls in how you “pronounce” it.
Area51 lol you didn’t hurt feelings….Everyone that has seen me at other Sites are going “Don’t you know that is the Nymph, she’s always that way” I preplex a lot of people……I love this bottomline…..Plus, Artist I like the name…Scott the Warrior….