Thursday, August 09, 2007


So much fear and panic. A 6-1 ratio of decliners to advancers on the NYSE. 387 points lost on the Dow, 56 on the Nasdaq and 44 on the S&P . Banking was the worst hit sector for obvious reasons while semiconductors were left relatively unscathed in the selloff.

Quant hedge funds are getting an ass kicking and perhaps this explains some of the heavy selling as these funds readjust their positions. Thats why in my opinion the best way to approach the market is to be as flexible as possible. Having a set strategy only to find out it doesn't work under certain conditions can be costly. Just ask LTCM , Amaranth and co. The market is like a wave and the successful trader a surfer.

Did President Bush just jinx the markets or what ?

"I'm not an economist, but my hope is that the market, if it functions normally,
will be able to yield a soft landing," Bush told a small group of reporters at
the Treasury Department on Wednesday. "That's kind of what it looks like so

And that was just yesterday. The Dow responds with its second biggest loss of the year.

When there is fear and panic, its often profitable to bet against it. This is a great trading market. Playing the swings is highly profitable. I would buy a bearish open tomorrow and sell into a bullish open. We may test last Fridays lows tomorrow or next week.

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