This Market Is 'Uninvestable'

My comments from yesterday’s extensive post still apply since despite the mixed bag today, not much has changed with charts or conditions. You may view that here.

The best thing is for some sideways movement but that falls more in the wish department. A rally can’t be discounted with markets much oversold nor can another precipitous waterfall drop.

I’ll add one more thing which I’ve mentioned previously. These past few weeks have been a delight for day-traders given the tremendous intraday volatility. But, for position traders or typical investors this has been a high-wire act fraught with immense risk. Taking a position and holding it has been too difficult hence my comment that the market is currently “uninvestable”. Gains on short or long positions and reasonable “stops” can be wiped-out in just a few hours given the current environment.

These conditions will change at some unknown point. That’s all anyone can say. But, managing risk is the number one priority for most investors. We’ll have our chances soon enough.

I’ll be on the radio tomorrow afternoon for those in the Palm Beach, Florida area between 5 and 6 PM EDT if you wish to listen. It’s Seaview AM radio 960 and you can listen live from their website.

Further, sidekick Greg Newton and I will be podcasting tomorrow with the presentation posted some time Friday evening.

Enjoy your weekend.

Comments

[MarvinMBA:]

I suppose there is a lot of risk in todays market. Very few of us have the guts to get in there and hang in during these gyrations. But my last few posts have suggested that this might be a good time. I bought and sold Microsoft a few times during the last few weeks always making a little by trading. This morning I bought back MSFT shares and I am happy I did. One think that has not been in the news by the pundits is the possiblity of
stability...not a turnaround but a quiet period (at least in the USA) for things to sort out...I'm betting on that quiet period. We do not know what the future will bring but I'm betting that computers will always be in the picture no matter what..MarvinMBA

2008 Oct 23 07:47 PM

[buyitcheap:]

My stops have been hit twice and you're right, best thing to do is sit in the corner, lick the wounds, and wait.

2008 Oct 24 08:11 AM

[carey_jim:]

I think you are right.

I lost about 35% of my play money in less than four hours a couple of weeks ago when SRS got caught in a short squeeze and I was asleep at the switch taking a well-deserved but expensive nap.

It was a totally illogical, unforeseeable (but typical panic) short squeeze. If I had the nerve to just sit tight (which I thought I had but discovered I didn't,) I would be up about !0% from my high. But fear is just as real as a P/E ratio and far more persuasive.

I'm sleeping at the switch without fear these days but I hate to see SRS climb in value.

We understand life backwards with great wisdom but we are condemned to live it forwards with greed, fear and all those other sins.

2008 Oct 24 01:10 PM

[Fabien Hug:]

I started day trading and entered a position in GG @ 23 just before it started to drop. I tried to sell it @ 22.30 and the online broker blocked the trade because my account was under $ 25k and I was categorized as day trader since I did 8 trades one day on JPM! Now GG is around 16 and I love these rules.

2008 Oct 24 01:34 PM