Sunday, February 22, 2009

Are we there yet?

An accelerating downside momentum and the convincing breaking-down of DOW last week flash serious warning signals that we might see another leg down in this bear market in coming weeks. However, at this stage, I will be reluctant to be a mid/long term bears overall. Playing short-term/DT bears is not ideal either as the intra-day volatility has been incredible, and mostly hurtful to short-term/DT bears. On the other hand, with DOW making new lows, SP teetering on the edge of the cliff, and both NASDAQ/Russell2000 broke down 2.5 months trading range, I feel very uncomfortable to aggressively build long positions for mid and even long term holding, as any rebound will face stiff selling with so much overhead supply.

For next week, I do feel there will be some over-sold rebound, so I will definitely consider bottom-fishing on any big gap-down at the open. However, I will be quick to lock in profits on any of such trades, unless, both C and BAC indeed get nationalized and the market sells off in knee-jerk reactions, in which case, I will consider some aggressive mid-term long positions, even in the financials (may use FAS or TNA). Speaking of C/BAC, my gut feeling is if their issues are not clearly resolved one way or the other (actually, only one way?), the market will have a tough time to reverse the slide.

Day traded last week for the third week on a roll, mostly on GS and POT, and made another couple of grand. I really don't want to DT, but at the moment, it seems to be the better strategy.

Will post some trading calls later on if I get chance.

1 comment:

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