Fear and Buying or Fear and Loathing…Preparation Matters

The great thing about fear in the markets is you do not need to get fancy to make money.

I got fancy last Monday and I paid.

I wish I had waited until Friday’s panic to make all my buys.

Friday afternoon I was buying and sharing on Stocktwits in real time.

I stuck to the boring S&P index and Amazon.

Here I mentioned that I was buying $SPY (1–30 pm est).

Here was my Amazon buy a little earlier.

Stocktwits tracks the price and time so you can see these were huge gains I captured in just a few hours.

I flipped out the S&P, but I held the Amazon for now.

Yes it is scary to buy stocks into a panic.

I dream of setups like Friday even though I rarely trade anymore. My losses on $XIV had me more in ‘fear and loathing’ mode than ‘fear and buying’ mode.

I don’t know if Friday marks a major bottom, but my favorite indicators were lined up for me…

The S&P was hitting it’s upward sloping 200-day moving average:

The percentage of stocks trading below their 50-day moving average was in the teens (green zone):

During panics, less is more. The markets do not give you do overs.

PS — Exxon had it’s worst week since the financial crisis. Ugly looking mega cap, but not quite General Electric.

Originally published at Howard Lindzon.

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