After President Obama's spokesperson had a press conference, the stock market erased nearly all of its 270 point loss for the day, within about 20 minutes. The Dow had been down only about 35 points. I thought we might even move into the black. Now, however, stocks have reversed again, and the Dow is headed downward again, dipping to -175 at the moment of this posting. This is why I don't take longer-term futures trades in stocks (I do, however, in my ETF trading, where I am still short stocks). As a trader, I always keep in mind two principles regarding stock trading:
For stocks to rise, there must be active buyers in the market. All it takes for stocks to fall is for there to be few buyers in the market. No short sellers -- or sellers of any kind -- are necessary for the market to fall.
There is almost a perennial bias in stock trading for prices to rise. Personally, I take this phenomenon as evidence that we have not yet seen any signs of a capitulation. When this phenomena reverses, it will be a sign to me that a genuine reversal has occurred.
After President Obama's spokesperson had a press conference, the stock market erased nearly all of its 270 point loss for the day, within about 20 minutes. The Dow had been down only about 35 points. I thought we might even move into the black. Now, however, stocks have reversed again, and the Dow is headed downward again, dipping to -175 at the moment of this posting. This is why I don't take longer-term futures trades in stocks (I do, however, in my ETF trading, where I am still short stocks). As a trader, I always keep in mind two principles regarding stock trading:
