VitalAccurateThinking

Which Way Will It Go?

Over the course of five days, we have witnessed historic swings in the stock market as show by this picture:
Anyone who tells you they know where things are headed in the short term, is just guessing.

So I guessed with a couple of purchases on 10/2, 10/8 and 10/10 trying to work my way in where I thought the bottom was. Of course, it went down from the first two trades and is barely even for the 10/10 trade. They were not big positions as they total <6% of my net worth, but in hindsight, I should have waited.

So, my investment strategy is to let things find a bottom and then work their way up with some strength. What I mean by strength is up moves on good volume and several days of sustained increase. Sure, I will miss the real bottom, but that is better than falling for a bear trap.

I should mention that I am looking for the bottom within the next four weeks, a decent rally and then a top followed by another bear market decline. Of course, we could continue the downward trend in the run up and following the election. In that case, I will sit here with cash and wait for better times and better deals.

That is my guess. What is yours (backed up with cash entering the market of course)?

posted by Jim VAT @ 4:56 PM