Has It Been Emotional?

 | Oct 08, 2012 | 11:11 AM EDT
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After an hour of trading we are finally seeing a bit of a bounce and breadth has improved, but the selling has been pretty steady.

The biggest gainers are some beaten-down names like Netflix (NFLX), Chipotle (CMG) and F5 (FFIV), while the mighty Apple (AAPL) continues to struggle and Google (GOOG) sees a little profit taking.

We held the early lows, a positive, but the limited dip-buying interest and the lack of good leadership is a warning sign. I see no reason to rush in here and buy right now. If we close strong I may look at some entries, but for now I have little interest but to do some intraday flipping if opportunities arise.

In a market like this it is very important to examine your emotional attachment to stocks. It is very easy to hold on to something you have been invested in for a while, simply because it is comfortable and familiar. For some reason, most people simply don't like the idea of selling a favorite stock that acts poorly and then rebuying it when it improves. It makes sense from a strategic standpoint, but many people just can't bring themselves to pay up for a stock that they sold at a lower price.

I deal with that by thinking of each new buy as a totally new trade that has nothing to do with what I may have done in the past. I don't want to be influenced by past success or failures at all. Some of my biggest gains have come on stocks that I had sold at lower prices and then rebought when they have started showing momentum again.

With the way this market is acting, I'm leaning toward selling and sitting in cash. If I have to pay up later to jump back into some stocks I like, I won't hesitate.  It is just a cheap form of insurance and an easy way to minimize risk.

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