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The market showed signs of another sell off today with no good news to be reported anywhere.
Stop orders should be the action of the day. You should be protecting any profits you may be showing as a precautionary guide if nothing else. A stop order allows your broker to sell your stock if it drops below a predetermined price. I hope I am wrong but if not there are stop orders as some protection.The reasons for a sell off are too many to list but I'll give a few. Some analysts still beleve the sock market is over priced. The last of the baby boomers that did not pull thier retirment out of the market yet, will within days. The retirees that have money in the stock market yet will also pull out soon, very soon. Everyday investers have no reason to stay in.the market, unless you enjoy the frustration of earning very small profits with the chance of lossing it all sundenly is something you enjoy doing. Its been a relaxed market for about 8 to 10 days now. Just long enough to get comfertable. just long enough to get you to invest a little more thah usual. Then bam, Sell Off, but like I said with all the good news lately it might not happen.The present state of the econemy,cash is king. Even with the lower interest rates borrowed money is hard to come by. Institution buyers will be looking to cut losses as they rode out the last sell off and caught a lot of flack from investers. I don't think they will sit on thier hands this time. Of course there is the chance some good news could fall froim the sky. The FED has done about all they can do. They could buy out all the ajustable rate mortgages out there about to foreclose. Or send $1200 emergency checks out to everyone with a SS#. The trouble is they just can't fill the hole that falling house values are creating now. A home worth $200,000 financed @ 80% or $160000 is now worth $158000. Now that home can only be remotgaged @ $126400. Pity the fool that mortgaged @ 100 % or 110% like I saw advertised in 2005. Remember 2005, home prices will never go down and those ajustabvle mortgages won't rise, these are the lowert interest rates in a decade. Did you hear that story ? Of course thats not the only problem we have right now, thats reallly old news. Now we have high energy prices that seem to have no ceiling, unemployment benefits running out, no savings and no incentive to save. Declining sales in all sectors but gas and oil.This is nothing that is not on every news channel every day.Keep your eyes on the weather , one cold snap and oil will go crazy Its starting to seem like the only good news is about the war. I would love to recommend a stock right now but, in good conscience I can't. A few stocks I was watching off the rader fell $8 to $12 with good earnings for no reason. So watchout, good luck and Oh yea, don't forget stop orders. Ya know LDK looks like it could move up some more. (couldn't help it, theres always a few that are moving)
Good luck and oh yea, don't forget to use stops. Ric Bottorf
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Comments (1)
I wish there were true stop orders here and not just limit sells. Once those are placed it takes some work to undo it just to sell to raise some cash or what ever. What I would really love is trailing stop limit orders but I guess that is way too much to hope for. Besides, with ths volotility, they would trigger way too fast anyway I guess.
And yes, I am waiting for the selloff as an opportunity to get back in at lower prices.
Good luck,
Uncle John
Posted by Uncle John | February 29, 2008 9:09 AM