I am in front of the computer looking for the catalyst in any market that justifies the movement down. There is not a catalyst other then retail traders (dumb money) being scared and running for the sidelines. There really is no new news that warrants this sell off on the market. Some of you may have noticed the shares I cashed in over the past weeks. We have taken profits off the table on some of our winners. You may have also noticed some positions I have not taken the profits. I am a longer term investor knowing the fundamentally sound companies will come back. ANYTHING we can make in the run down are profits on the way back up. At this moment this is not the time to turn everything into cash. This is where we make some money on the way down when everyone else has to just sit and watch everything go down.
Now there is worry in Europe, debt for the US and numerous other problems in the global markets (global slowdown). This is nothing new and everyone knows the financial conditions of everyone else. Capitulation is the technical term for the current market conditions and the selling off of stock positions. Usually a 10% downward movement is considered healthy for the market. It means we weed out the small day traders and give institutional trades (smart money) the chance to buy on pullbacks in the markets. I would like to add shares as stocks tumble to dollar cost average our positions. This is the time of the year that the term doldrums is used. Most years’ summer is a slowdown and global slowdowns occur yearly. I am looking to use this as a buying opportunity before things snap back to where they were. AAPL is still a great company and will be selling tons of iphones and ipads. CAT, DE, F and BA all have contracts in place and will continue to sell product. SNDK, NVDA still make parts for tech companies. The US companies are in a much better condition that 2008 and the earnings warrant much higher prices than we currently see.
I might make the comment that this could be the markets showing their displeasure in the debt ceiling “final” resolution. It is just as stupid as the government process of raising the debt ceiling that we just went through. It only hurts the market with the sell off and volatility. I have been through this before and this is how we will make a run by the end of the year. I almost want to say this is funny but it is never funny to see these type of market movements. This reaction should have happened two or three weeks ago. It is a little late but I would expect we find a bottom here soon. The US still has unemployment, housing, and debt issues to resolve and it will be painful to muddle through. It doesn’t mean we can’t use this as an opportunity to help the accounts and it doesn’t mean we won’t see an end of the year “Christmas Rally”.