Blah, Blah, Another Selloff
Blah, blah, another selloff. Everything except Treasuries, High Grade Corporates, Natural Gas, a couple of grains, a couple of softs, and some commodities with faces – was DOWN. Pretty good magnitude, too, about 3% give or take in the stock markets. But there’s not really showing anything resembling panic in the options side of the ledger, so there will be no Timing trigger from today’s action. I read some rumors that there were some funny clips on options in Europe, but I have nothing substantiated to share with y’all. Currently the lower-than-expected ISM readings are being blamed for the selloff.
My intuition is that the markets have already found a bottom, for the intermediate term or longer, a while back – as I mentioned a couple of weeks ago, and reiterated since. But I’m just gonna trade my plan, whether that turns out to have been the bottom, or not.
Man, it must really suck if you are trying to navigate these markets without a trading plan! Right? Yeah … I guess the bright spot is that there’s so much public information available with which one could formulate a trading plan. I mean, you could even use a research paper and a bunch of other free and/or inexpensive resources as your guide! Hell, you don’t even need a complicated plan, a simple asset allocation, with or without a trend overlay, has got to work better than selling into the downdraft, or panicking.


February 5th, 2008 at 7:19 pm
Bill,
I will have to disagree. I think we have at least one more leg down. At the very least we will test the bottom before all is said and done. However, I will agree that I do have a bullish sentiment for the next few weeks at the very least.
While a few sectors are heavily beaten down, many of these high beta stocks have hardly correct when compared to many of the previous bear markets.
In any event, there is no rush for anyone to invest their hard earned money right now. Though I will admit that any test of the bottom will be closely watched by me and I will start legging in then.
Finally, yes you are right in trading your plan. Also, it would suck not trading with a plan right now. Really suck.
February 6th, 2008 at 6:23 am
Historically speaking - some bottoms retest, and some don’t. Some bottoms have big options cues, and some don’t. Everybody’s gotta pick their poison, and realize that whether they’re wrong or right THIS time, they’ll be wrong a lot OVER time - and bet accordingly.
February 6th, 2008 at 9:54 am
valid
March 28th, 2008 at 11:30 am
[…] wasn’t a rally, it was a bounce, a possibility I acknowledged on February 6th: Historically speaking - some bottoms retest, and some don’t. Some bottoms have big options cues, […]