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Welcome back individual investors

2

This was on front page of IBD couple of days ago. The TD Ameritrade CEO was going gaga over how the individual investors are back in full force now that market is up several montha in a row.

We had a discussion on members site about it and we discussed how it is time to really protect open profits and not get cocky and keep one eye on quick exit. I made 2 videos warning people to not get carried away.

Extremely good momentum does not last forever. If you go to the Market Monitor tab on this site and see the column


When the readings go above 20, it is a sign of excessive bullishness. It invariable leads to correction.

This time there was a bit of delay in selling hitting after it went up. But invariably this is what happens.

Seen this movie for 14 years .... I know how it always ends....

People get mesmerised by excessive momentum and forget where there cap is while looking at vertical moves.

By the time they realise what happened not only their cap but clothes are also missing....

And as to those individual investors who very excitedly entered the market now, well the market is teaching them nice lesson in how to be a bag holder....

Welcome back individual investors after missing a big rally. 

The bags are in right corner. You can take as many as you want. 
Become a member Methods

2 comments:

David said...

I see this happened in early Feb. 2012. Do you see a similar result playing out or something different?

Pradeep Bonde said...

We will probably get around 5 to 10% correction