Heavy selling in many stocks owned by funds

Once in a while the market itself becomes the catalyst and individual stocks and catalyst for that period becomes secondary. Currently we are in that kind of situation.

Heavy selling in many stocks owned by funds is driving this as they reduce exposure. After selling down to a level there tends to be a brief pause before the fresh wave of selling comes in.

Many of the stocks that have broken down in last 4 weeks are not done going down. Any bounce in them is likely to be sold. Many of them may never come back to their former glory.

At some level in index buyers will get interested. But as of now we have not reached that level. That means every bounce is suspect and likely to fail.

If you are losing money in this market it is a sign of poor risk management and wrong timing. Lot of traders just can not bring themselves to cut their losses. Seating in losing position as losses pile up can be devastating and sets you up for failure as you will not be in a position to benefit when market reverses.