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.