Dealing With the Crazy Swings

This market sure isn’t making it easy on anybody who went long yesterday. The market was off the lows, but it feels like we could return back to those levels if the wind blows a certain way. I can’t believe how fast we go up and down 100 points these days.

The one thing I find curious is that I didn't see any analysts out there calling a bottom yesterday. That is certainly a good sign for anybody bullish, as I like the analysts doing the opposite of what I am. There sure are a lot of negative headlines out there.

A few more “safe” stocks to consider for the long side are: Coca Cola (KO),  Procter & Gamble (PG), Heinz (HNZ),  and Pepsico (PEP). And a great way to play the indexes if you don’t want the added risk that stocks come with are iShares Russell 2000 Index (IWM), SPY, DIA and QQQQ. I stay away from the double ETFs, as they present too much risk for me in these markets.

Comments

[MarvinMBA:]

Buying on the dips and selling on the updrafts seems to be the way to play....but beware...it could downside in a hurry...where is M1 and Job Groth to come from in the long run...nothing to really help the troops that have to pay the long term price of this ongoing destruction.

2008 Oct 25 02:50 PM

[H-Bomb:]

Who is Job Groth?

2008 Oct 25 03:03 PM

[mdmrjsds:]

There are a lot of people out there who use trading systems that use buy and sell points.

The market behavior recently could be looked at as a way of stripping wealth from those people. I'd need to see numbers in order to determine if it is deliberate or random. Hedge funds would have those kinds of numbers and the capacity to analyze them. That is, is it cost effective, is there an edge?

There was someone on here advertising that everyone should have trailing exit points of some kind in many groups a few days ago.

Hmmmm.

2008 Oct 25 03:10 PM

[Jeff Pierce:]

I think the unrelentless selling is more from people getting margin calls who have to sell at any price. This type of market action just feeds upon itself. Friday's action really could have gone a lot worse, and it really feels like there's underlying buying going on as the market tries to find a bottom, even if it's only for the short term.

2008 Oct 25 06:48 PM

[anarchist:]

Anyone notice that all the buying is done in the last half hour latley except Friday where the last half hour of buying was overwhelmed by selling in the last 5 minutes. Does Paulson have the authorization to buy the market other than bank stocks?

2008 Oct 25 08:26 PM

[daytrader:]

i went long twice yesterday on sso,which is a double etf.made a couple of bucks,got out.made plans for the weekend.what's the problem?

2008 Oct 25 11:15 PM

[Jeff Pierce:]

They're great trading vehicles for intra-day trading styles, but I carried over a few positions and didn't want the added exposure that double etf's bring when holding stocks overnight.

2008 Oct 26 12:52 AM

[bbowen7:]

Unfortunately, the market has theree major problems to deal with, and they are only coming to attention sequentially:
1. the mortgage/ credit meltdown.
2. the coming long and deep recession
3. huge Amereican government policy shifts - taxation (higher for wealth producers); energy (carbon taxes); and spending (national healthcare, etc.) We already had huge increases in spending under Bush, and now the nationalization of banks, insurance companies, etc. America's preeminent financial position in the world is over.

2008 Oct 27 12:26 AM