Hey Folk
Monday we seen a very wild swing in indices movement especially in the US. S&P 500 swing a good 120 points up and down. The real reason of selling as the news say are everywhere. So what the real news???? Is it China, or is it North Korea and South Korea, is it the FED, is it Ashley Madison etc etc ???
In 19 Oct 1987 it is a Monday, the stock market decided to come off about 23%. For many years till today, no one can justify or say what cause the massive drop intraday. Always dropped like these are unknown and the real reasons will remain as mystery.
Why bother about the reasons anyway. Does that make us money? The press have alot of things to say. They need to be the headline if not they will be out of job. Honestly, what does knowing the real culprit, where the real culprit cannot be known, help us in any money making.
What I know is there are more people selling then buying at the same point of time which cause market to move lower. Each transaction is a sell = buy. So for every seller there is a buyer. That mean to say, if the price is executed at that particular price there are seller and buyer. Simple as that. Why is there buyer at that price where everyone is saying is the end of the world??? Are they the foolish participant, the smart ones or are they the computers?
From the upward bias of the stock market, I do believe that predominately there are smart investors. There are sure to have foolish investor/trader that enter at the wrong time. There is also computer algo that uses speed to give them an advantage. The wild swing in the market movement are the Flash traders or the HFT. They have the ability to enter trades in split second causing the market to swing so wildly. I do admit their presence had make traditional lump sum investment for the long term less attractive and more demanding.
Monday we seen a very wild swing in indices movement especially in the US. S&P 500 swing a good 120 points up and down. The real reason of selling as the news say are everywhere. So what the real news???? Is it China, or is it North Korea and South Korea, is it the FED, is it Ashley Madison etc etc ???
In 19 Oct 1987 it is a Monday, the stock market decided to come off about 23%. For many years till today, no one can justify or say what cause the massive drop intraday. Always dropped like these are unknown and the real reasons will remain as mystery.
Why bother about the reasons anyway. Does that make us money? The press have alot of things to say. They need to be the headline if not they will be out of job. Honestly, what does knowing the real culprit, where the real culprit cannot be known, help us in any money making.
What I know is there are more people selling then buying at the same point of time which cause market to move lower. Each transaction is a sell = buy. So for every seller there is a buyer. That mean to say, if the price is executed at that particular price there are seller and buyer. Simple as that. Why is there buyer at that price where everyone is saying is the end of the world??? Are they the foolish participant, the smart ones or are they the computers?
From the upward bias of the stock market, I do believe that predominately there are smart investors. There are sure to have foolish investor/trader that enter at the wrong time. There is also computer algo that uses speed to give them an advantage. The wild swing in the market movement are the Flash traders or the HFT. They have the ability to enter trades in split second causing the market to swing so wildly. I do admit their presence had make traditional lump sum investment for the long term less attractive and more demanding.
Here is the S&P500 chart. The drop came last week and see this week we are half way there.
The indicators as said last week suggest that it is a uptrend in the long term but downtrend in the short term. So here we go, market moved up. Did I buy?? No, in fact i dint trade and watch it happened. At this volatile period, the best is to wait for the dust to settle. I am still a buyer in the market.
I still think that the stock market have still room to grow. China market may hit a double top. For regular investing approach investor, if your premium happen to catch the bottom, I really congratulate you. The COT I shared last week had shown huge buying, the level of buy that is now is many years high. This is not a timing tool. It just tell us that the smart money are buying in this huge drop.
For now i am staying sideline, let observed further and the market will come to us.
Oil is another one that the COT data for the past few months had shown high level of producers buying into them. However, this market is in a massive downtrend so do not be too eager to go for a buy.
Remember price rulzzz
cheers
