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Enjoying the roller coaster ride...



October 30, 2009 – Comments (8)

I find it humorous that the final trading day of the month, the day before Halloween, finds the fear index jumping up dramatically.  I also find it humorous that a bunch of bears come screaming to the front of the line calling for the end of all things bull.  But from this rookie's point of view, I see a low volume day on the final trading day of the month with a 2.5% pullback as just a function of the correction we have all been waiting on, folks out there taking profits and re-aligning their portfolios, and freaking out because the media says we should.

Personally, this lemming is going to sit back and wait for the rest of the lemmings to pile into the sea, and then I will walk across their backs to get to the other side.  I think it is a little too early to freak out.  Had volume been at record numbers, then I might be singing a different tune.  But from my limited experience, low volume is a fair indicator that the extreme volatility is more a product of some market movers pushing things where they need them to go.

If I were the Oracle of Omaha, I might be looking around for another opportunity to buy something.  Be greedy when everyone is afraid, and fearful when everyone else is greedy.  If I had some money laying around, I might start thinking about getting greedy.

Oh well, time to get some decorations together and prepare to scare some neighborhood kids.  Who knows, perhaps I'll scare some parents, too, by introducing them to Alstry's zombulator...

Happy Halloween...and Fool on... 

8 Comments – Post Your Own

#1) On October 30, 2009 at 5:21 PM, davejh23 (< 20) wrote:

Is everyone afraid?  Even as the media has been talking about the possibility of a correction, bullish sentiment has been high.  This isn't the kind of fear I'd be looking for in order to snap up bargains.  In either case, it's too early to call.  Bulls were celebrating yesterday, declaring that the recent dip was over...GDP is the market will shoot to the moon!  Today, an overall bearish trend continued, but who knows?...the S&P might be at 1100 again a couple weeks from now. 

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#2) On October 30, 2009 at 5:31 PM, selfdestruct2 (34.26) wrote:

My game plan: If stocks go up, great. If things turn bad, I'll pick up some shares. I have learned (from my very limited experience) to be " calm and patient ". Getting too freaked out caused me to do things like selling Apple at around 130 and Google at 400. Gotta be in for the long haul :)

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#3) On October 30, 2009 at 5:49 PM, rofgile (99.61) wrote:

I don't think things are that scary yet. 

One of my stocks, MTW just reported a surprise loss when they were expected by many to have a profit in Q3 (including myself!).  That combined with such poor market sentiment today should have resulted in 20% losses for MTW, if the market was behaving like it did back in January.

Instead, the stock lost 10%, but mostly stayed ok today.  I think there are still lots of investors ready to buy in on pullbacks of good companies.  And I think DOW 10,000 / S&P 1100 will have a strong pull to it still.

Statistically, most gains come between Halloween and May of the next year, and with GDP growth / end of recession occurring, I don't see why this period should be different.



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#4) On October 30, 2009 at 5:54 PM, goldminingXpert (28.80) wrote:

Buckle in, sharp drop ahead.

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#5) On October 30, 2009 at 7:15 PM, Varchild2008 (85.09) wrote:

(DPS) Earnings Report <----- Has twice in a row jump started a faltering rally.... I think it will succeed in jump starting this flatering rally again.

But, the problem is not how DPS did in Q3.... The Problem is Consumer Spending which is looking awful since the back-half in October from a personal experience (Michigan Mall Shopping) perspective.

I *fear* that the market won't find many reasons to trade back up as long as Consumer Spending keeps pressuring this market to either go Sideways.... or Go DOWN for the time being.

I think BULLs need to treat today's market drop with a little more seriousness... Volume Size is irrelevant as a market can trade up or down off any type of volume size.  A Rally DOWN doesn't happen only after a massive amount of Volume happens...

A Ride DOWN occurs once enough days of modest declines and enough weeks of modest declines start to tire out and wear out the Bulls to the point where everyone stops buying and starts to just sit back and see if the market goes lower.

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#6) On October 30, 2009 at 8:20 PM, Mark910 (< 20) wrote:

"I see a low volume day on the final trading day of the month "

Holy smokes...what market are you looking at. NY was at about 8B.  This lemming and most I know were either safely on the sidelines or profiting on the short side.

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#7) On October 30, 2009 at 8:44 PM, goldminingXpert (28.80) wrote:

Had to switch to backup servers at NYSE because it was so busy... low volume, ha, bulls are desperate.

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#8) On October 30, 2009 at 11:32 PM, MikeBobulinski (< 20) wrote:

Mark, I'd agree that 8B would be a high volume, but from this quote in an end of the day report read on a few financial sites: "Market breadth was negative. On the New York Stock Exchange, losers topped winners by five to one on volume of 1.65 billion shares. On the Nasdaq, decliners topped advancers four to one on volume of 2.69 billion shares."

I'd say that your figure is off just a bit, but I will have to admit that this figure is not as low as I was lead to believe by my reading earlier in the evening.  Looking at my Ameritrade account, the volume was called above average.

That said, I will retract my low volume statement, but stand by the rest...this might be the correction we have been waiting for, there is a lot of fear in the market as evidenced by folks on the sidelines waiting to see what happens, and who knows...perhaps it's the bears turn to run amok.

As for me, I am optimistic, my picks indicate that I am a bull, but I am more of a go with the flow kind of guy trying to learn about making money on both up and down markets.  Perhaps this dip/drop will provide me with an opportunity to learn about making money in the downswing...

Fool on... 

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