Wednesday, October 1, 2008

BE Very Careful PLEASE.

I cannot stress this enough. I have traded thru 1998 market downturn(that was kind of short lived but very scary) and I also traded thru the 2000 bear and that was long(2 years) and very very scary and I recall many many folks on CNBC and other places saying things like: "everyone is negative, so i am bullish" or "All this negativity is making me bullish". NO! NO! NO!
Listen: Your idea is correct in theory but be very careful about being the EARLY BULL. There are times when as bad as sentiment is, it will surprise you and get even worse until LITERALLY every bull has ran out of the building and Literally ALL hope is lost, LITERALLY. Think about ehat i am trying to say here: The WORD LITERALLY is key here. BEAR markets are very very scary and emotions are extremely negative and the moves up and down are HUGE. This downturn we are seeing right now, in my eyes is THE MOST SCARy out of all of the three i have traded thru. This one is hitting home and it is hitting the life line and the viens that feeds the system, credit and banking. We are dealing with a complately different animal folks, so take off your bull hat and bear hat and start thinking like a trader. A TRADER will be ready to exploit ALL conditions and will change his stance on a moment's notice. Traders will survive this.

happy trading.

7 comments:

Anonymous said...

Agree 100%....this is a different beast. Be careful guys/gals


"Q"

Book said...

So true. Thanks for the reality check…

Anonymous said...

hey, guys dont get me wrong. I did not claim that a person needs to be bullish because everyone is bearish, its just that shorting into the abyss with the vix at these levels can only be acomplished by a very disciplined person and there is not many of those.

YoungChuck said...

With everyone so bearish I think I better get long, with leaverage. Forget leverage just call options way out the money short dated call options. I kidd of course. Great post.

Anonymous said...

stewie, end of the 80,s early 90s were really bad . yes this is bad but i think the big difference today is the 24 hour media coverage. we really did not have that back then.
the media adds to the panic state big time. i was in the trades back then and the same situation happened.
a person could not sell a house. that lasted from 1989 and slowly by 1995 was getting better. that' s 6-7 years.i said to people i know and they hated to hear this but this real estate market probably wont start to get better until 2012 -2013. that would be about how long it took back then. until that gets better i think we stay in the doldrums. it is amazing the correlation the r/e market has on the entire economy. and if you look back in the 90s that is about when the bull started to kick in, 95 or so. just my 2 cents. Bill

MatchPointTrader said...

Thanks Stewie. Again an insightful post. I have learned the hard way in this market - I have been a "really early bull" hoping to get the most of the lunch - in spite of all the early warnings - and I have just managed to ruin my lunch. Just wanted to say thanks for your earlier and current posts - warning and strategies. Also, most of the profitable trades I have got - I made them early in the morning. Some of your tips really paid off.

traderdigs.com said...

Great call on LVS, down $7 already since your post.

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