Buying Oppurtunity or Beginning of a Bear Market
With the Nasdaq dropping 2% and the S&P 500 losing 2.1% yesterday is this a buying opportunity or the beginning of something else? No one has a crystal ball nor do they need to know the future. They do need to have a complete trading plan all thought out. I have been safely out of the stock market for some time except for my long position on the VIXY. The VIXY is an inverse of the stock market and it is called the fear index.
There is good reason to fear…yet potentially be optimistic. We are directionless currently ( no clear trend). The stock market’s failure to keep any part of Wednesday’s big gains raises questions and doubts of a recovery. The Nasdaq’s action over the last several weeks has been simply ugly. We are currently under the 50-day line which is an important technical indicator and worse, attempts to retake it have failed ( miserably yesterday). The breadth is very negative with losing stock 6-to-1 on the Nasdaq and by about 7 to 1 on the NYSE.
One must not trade their opinions and must be flexible. At this moment I am preparing a list of stocks to purchase if the market turns around.