One of the consequences of having a market that is so lopsided and never seems to pause is that there is a tendency to rush to sell at the first sign of weakness. I'm guilty of this to a certain degree because I try not to anticipate a top and react as quickly as possible when there is troublesome action.
But what is happening here is folks who were quick to hit the eject button after weak action like yesterday's are being whipsawed when we bounce right back. Instead of feeling good about quickly raising cash and standing aside, they are cursing the market beast and trying to put money back to work.
Many market players have a tough time psychologically rebuying a stock that they just sold, but in many cases that is exactly what you need to do. If I rebuy something at a higher price than I sold it, I consider it an insurance payment that I made just in case some downside momentum actually kicked.
We are right back to where we were Tuesday and, once again, the mood seems extremely complacent. Anything that worried folks Wednesday is forgotten and the main focus is on trying to put money to work, as this market apparently isn't going to correct any time soon.
I've been a bit too aggressive with my flipping and selling things prematurely, but I'll keep looking for new buys as the day winds down. It feels as if the computers are helping to squeeze us, but that is the norm these days and nothing surprising.
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