As I peruse the Stocktwits stream this morning, I am mildly amused by the number of people who seem to be anxious to declare the validity of this “rally”. If this describes your mind set…I’m warning you: there is a high probability that you are going to get sucked into buying at or near the top of another reversal.
The time to buy was when things looked horrible…i.e. last Friday. Your upside here is very limited. Come on…just last Thursday, shit was spiraling out of control…Mad Max style…now people are looking for long “breakout” swing-trades?
I don’t know, maybe my experiences with the market are completely wrong and I don’t know what the fuck I’m talking about, but it annoys me greatly when I see people continually pumping ideas for trades based on strategies that are geared toward making money in bull markets. Even if this isn’t a “bear market”, this is one hell of a correction…and that needs to be respected.
I love Stocktwits…it is one of the only websites that I have open during the trading day…but I feel there is a flaw that needs to be addressed. @bclund mentioned something similar, in a great video last week, though my concern isn’t as scathing and more all-encompassing. From what I can gather, much of the traffic and membership of Stocktwits was developed over the course of the 2009-11 bull market (or, longer term bear market rally). There are many great traders who really share fantastic ideas and have garnered a loyal following of readers based on their timely calls and analysis during this run.
The problem is when shit gets ugly and difficult (i.e. NOW) and the great ideas that worked so well in October 2010 suddenly are getting smashed in the face with a shovel. It’s the ol’ square peg, round hole dilemma.
I’m not saying these people are not to be trusted, I’m just saying these people are not to be trusted…if you know what I’m saying.
This market is fucking treacherous…it’s a mine field encased with razor wire. My advice: if you are inexperienced in this type of environment, don’t trade. Don’t listen to anyone’s ideas (long OR short) on Stocktwits.
I post my trades for the sake of transparency…I would kick you in the shins if you tried to follow my trades in this market.
I know it’s very difficult to sit on your hands and watch a 2.5% rally from the sidelines, but when the people who “just had to get in because this might be the bottom” are sitting there in the red a few days from now…you’ll be happy you were watching Seinfeld reruns or doing something else instead.