Well, that’s why we do what we do. We sell euphoria. We buy fear. In my twenty years on Wall Street, I’ve only seen maybe two handfuls of days like this where you can make 15-30% in high quality, blue chip stocks — in a single day’s session.
The stocks I went out and bought this morning at the panicky open, are indeed up big already — $AAPL, $GOOG, $FSLR, $AMBA, $EZCH are all screaming higher off their lows. Remember that we trimmed all those names much higher and now we have our full-sized positions back on the sheets at lower prices once again.
Most pundits and traders missed today’s intraday 800 point rally in the DJIA and many actually sold at the bottoms into the panic. It never pays to panic. It pays to have a steady playbook that guides your decisions, not letting emotion dictate your moves.
Don’t look back and say to yourself “I should have bought more.” Of course it’s easy to say that now that the stocks you nibbled on are up 20% or more on the day. But you have to use tranches and be reasonable in the risks you take as you buy and as you sell.
This is why you subscribe to Trading With Cody — to help you form a playbook and then to act on it without emotions. Be cool.
Now all that said, it’s still barely halfway through today’s trading day, so don’t count your chickens before they hatch. I do think we probably put in a near-term bottom this morning when the DJIA was -1000, but there’s no guarantee. I’ll be looking to buy more if we get another whoosh down this week, as I do believe the Bubble Blowing Bull Market we’re living through is still heading higher over the next year or so.