Thursday, October 9, 2008

It's Over

Ok, I'm willing to admit i was premature in thinking this market would bounce today. But losing a few percent isn't bad when the whole world is crumbling. Keeping the stop tights allowed me to survive this week; all the while betting on a bottom.

I'm going to continue trying to pick a bottom in this market, because one of my central market principles is that nothing can move in the same direction forever. On the microscopic intraday time level, stocks reverse themselves all the time. There will be a day when this market bounces 1000 points. It might not be tomorrow, but it will be soon. I will keep the stops tight until that day.

I will know it is time to buy when the cadence of the last few days abates itself. Sellers won every battle this week, so when they appear to back away I'll test if there are any buyers. If it is truly a reversal to the upside, a simple buy the dips and accumulate strategy will do just fine. Otherwise I will keep the stops tight, so I live to fight another day.

Keep the stops tight.

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