Luring Buyers

 | Aug 23, 2011 | 12:50 PM EDT  | Comments
  • Comment
  • Print Print
  • Print

We finally have a better bounce kicking in, but it sure doesn't feel like buyers are very trusting.  Obviously conditions were pretty ripe for some sort of counter-trend move but I suspect that the folks who are fast to jump in don't plan on sticking around for long.

Many market players have difficulty with the idea of buying when they have a bearish bias. They can't justify buying anything for any period of time because they are so convinced that things are negative. The big counter-trend moves always cause them great frustration because it seems so irrational in their view.

At the other end of the spectrum are the folks who develop complex big picture bullish arguments simply because the market is oversold enough to finally bounce a bit. It always surprises me how many some people will day trade based on macroeconomic arguments.

We all have to develop a mindset that works best for us and it won't necessarily make sense to someone else. My particular approach is to always defer to the major trend, but to be very aware of the likelihood of very strong counter-trend moves with that bigger trend.  I'm not at all bullish right now, but I'll hold my nose and make some buys simply because the conditions are supportive of an oversold bounce.

News of Gaddafi's demise is close is helping to keep this bounce going and, as I wrote earlier, the longer we stay positive the more likely it will draw in more buyers.

Columnist Conversations

Lockheed Martin is fading into the close. The stock opened the session with a gap higher open after rep...
It's hard to argue with the price action or the momentum indicators, but volume, as reflected on the graph at ...
Time resistance to the current rally comes in between 4/22-24. Good reason to trail up stops on any longs! ...
Market continues to power higher going into the last hour of trading. Looking forward to earnings after the b...

BEST IDEAS

REAL MONEY'S BEST IDEAS

Columnist Tweets

BROKERAGE PARTNERS

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.


TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.