Sunday, September 21, 2008

Still Too Tough to Do Anything

I just have a few thoughts this weekend. I went through my scans as normal and my numbers are all over the place. I have never seen a week as volatile as last week was in my short trading career and I have a feeling that volatility is going to continue. Charts are also all over the place - lots of bearish reversals on stocks where they finished way off their highs. I added a few to the watchlist (QCOR, ABMD, MASI, AKRX, LRN, AACC, BABY, MMSI) but for the most part, if you want to go long, you can check out my post from last week where I showed some of the better charts I saw then. Unfortunately, there are STILL not a ton of high quality stocks ready to move higher from what I can see.

Technically, we are overbought on the short-term based on my scans, but that doesn't mean we can't still move higher. I still am of the opinion that technicals just don't matter as much right now - the only thing that does seem to matter is the news.

I just can't trade right now. My mind is not right to do so, and my heart is not into it. Maybe I am the only one who feels this way and just need to get over everything. If we do happen to get a follow-through day this week (starting on Tuesday) perhaps I will start looking more seriously at taking a few longs. For the most part, however, I don't think there is a good risk/reward to do so right now, and I know if my mind is not right, I am setting myself up for failure and losses. The day to day news and rumors that are out there are the only thing that is driving this market, and that is not an environment that I am interested in participating in. That type of environment produces wild, quick swings and lots of opening gaps like we saw last week, which makes swing trading(holding positions for several days or weeks) very tough. If I do trade at all, I most likely will close out positions at the end of each day, something I very rarely did before.

What if there is a delay in getting this bailout passed in Congress? What if a big bank like Washington Mutual fails anyway? What if we get some heavy selling without the benefit of short sellers ready to act as buyers to cover their positions? What if short selling is banned completely, not just in the financials? Don't laugh - it happened in Australia already. What if people finally realize that the government can't keep bailing out everyone and their brother without dire consequences to the U.S. dollar? These are all possibilities and I do not want to be holding positions if these news events are announced.

I continue to be very frustrated and almost sad right now. Our country is in very, very bad shape, and I don't know that there is anything that is going to get us out of it except time, barring a miracle. When I say I am not in the right frame of mind to trade, this is what I am talking about. I am worried about other things, more important things, than trading. I would imagine a lot of you out there are doing the same thing. I have begun to investigate things I can do to protect the money I have (such as gold and foreign currencies) rather than trade my account higher. Maybe I am just being too pessimistic.

I really hope we can pull through this. I hope I am really just overreacting to what is going on here. I hope last week was the bottom of this bear market and we will move steadily higher from here. From what I have read, however, I am just not that optimistic about any of things. Be careful out there readers. We are in a very dangerous period of time.

Ok, enough of this - onto some football. I need something to get my mind off of all this stuff. Good luck next week. Feel free to share your thoughts in the comments post.


Dr. Duru said...

I completely hear ya on this. I am sure a lot of traders are going to withdraw from the market until the rules to the new game are stabilized and made clear.

Anonymous said...

I am afraid that when people can't short sell to hedge their position, they are just going to SELL!

Me too am very disappointed with government around the world interfering.

SkyTrader said...

if you're willing to daytrade there have been some GREAT opportunities recently... amazing volatility