NASDAQ HORSEMAN, AGAIN
As the market struggles today, awaiting the FRB meeting tomorrow, AAPL, RIMM,GOOG,BIDU rally again.
It just tells me that the market is made up of more traders than one thinks.
Commodities under pressure again, as the media blast over the past couple of weeks took us to another overblown and overbought sector. That is why I repeat to myself, DO NOT BUY PARABOLIC MOVES. Look what has happened to gold, DBA (agricluture ETF). Both were fashioned by the media as the place to be. It seems to lead to more trouble than it is worth the investment. Why? If you catch the top, the losses are not just 5 or 10 percent, the losses will be 30-50%. If you want to play a hot sector, wait for pullbacks to important MA (20 or 50), or watch MACD or STOCHASTICS for short-term oversold conditions. This analysis says little about the long-term trend, just a comment on the “lower-risk” entry point for a hot sector. Even the IBD, the bible for momo players, says that “do not enter a stock 5% above an important technical breakout”. Bottom line, keep a level head and try not to chase the hype you hear and read.
3 years ago • Notes