Some investors are taking a look at Japan, or Japanese equities thinking to buy or sell based on the news. It is difficult to predict such a fluid situation. Sentiment can be useful. If it seems like a "smart idea" to buy, it may not be. If others are actually moving in, again, it is likely not such a good move. Traders might look at the recent chart of BP (link).
In the case of BP, the bad news was not a buying opportunity, at least not on the day of the news. The bottom came about a month later as events got worse and worse. This doesn't mean it will be time to buy TM or EWJ a month from now. That would be too easy a lesson, and too far a reach for a conclusion. It does mean that things might be bad, a stock might be at support, but if more bad news comes out, there can be a lot more downside. The chart can be helpful. For example, the two day move down in TM (link2) might be approximately half the move, so another 6 or 7 points lower to 75 makes it a lot more interesting.
Those few buying today or Friday, might use up their dry powder quickly and if the markets drop another 10% or 20%, won't have much more to commit. While those selling, might have huge positions they wish to get out of.
As always, for relatively slow moving position traders like me, it is almost always better to wait and watch. The heroes and the nimble can try and time the exact bottom, slow moving traders almost never do. Yes, sometimes a person will miss the move, but that is always the case.
No comments:
Post a Comment