Wednesday, July 6, 2011
The Pullback
Well here is the pullback that everyone was waiting for. It probably wasn't as deep as most expected but it will be hard to expect much more than this with the news already out. The contents of the wall of worry include China rate hike, Portugal, and general disbelief over last week's rally. Healthy amount of put activity in the index options. Looks like many traders want to hedge or just bet against this market.
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5 comments:
General disbelief and Major Worrywall at your service.
I believe market will stay tite and choppy without the upward drift that pays a btfd strategy. this correction wasn't deep enough to feed a btfd.
The more shallow it is the better it rewards BTFD. I'd rather buy a shallow correction and be immediately proven right than trying to buy dips that I need to keep an eye on because they keep tanking after it looks like it wants to bottom.
Now it looks like it wants to bottom and it actually bottoms. Dunno what else you would want really.
I was refering to the slow bleed correction this past 2 months. It was followed by one of largest % gain squeezes in history. That does not lead to BTFD environments.
banks rolling over..market will follow.
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