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Remember Musical Chairs

Published on March 7, 2007

Remember Musical Chairs

March 7, 2007

If you are playing musical chairs game, make sure you know how and when to grab your seat when music stops.

I am referring to the market crash and then market rally yesterday. Without going into too much of technical analysis, let me share my thoughts from a bigger picture point which charts may not help to understand. To be bullish, it takes a while before anybody is euphoric. To panic, it happens within a jiffy. Think about it. Recall any moment of life when you panicked and when you felt ecstatic. My guess is that you will discover the same answer that panic was much quicker than being ecstatic.

Why am I talking about this? Let’s link this analogy with the current market conditions. Whatever we gained in several months, it was washed out in a day or say a week. Another example; check out what happened last May’06. It’s pretty much the same story.

The question is, what changed in past two weeks that crashed market so suddenly and coverted the bullish talks into bearish sentiments. Now, what has suddenly changed within a day to turn everything bullish (arguably)? Whatever perspective one develops, make sure you are not the one left standing when the music stops? Think about it.

Hope this helps identifying some great opportunities for today.

Profitable trading, OptionPundit.

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