It seems we are heading into a short-term bear market around the world. Last night S&P 500 had its biggest drop in 2013 of 2.3% to 1552. Energy and raw-material companies took the biggest hit. It painful to hold onto energy stocks (like ExxonMobil, Chevron, Total etc.) but hang in there.
China also reported a slowdown in its economic growth earlier yesterday, GDP growth fell short of analyst's estimate, 7.7% vs 8%. I personally do not feel it is something to worry about because Chinese stocks are still undervalued and slow growth is better than no growth at all.
In Europe, ECB president is now saying that monetary policy is insufficient to resolve the root causes of the debt crisis and will require government reforms. (Duh!) If you think the economy can be artificially stimulated to grow without each government actively controlling their spending, you are mistaken.
Anyway so what happens now? Is it time to take profit? I am not so worried about the 'emotional' market situation but more so because i might not be able to hit my target prices on some counters and get out in time. Ultimately market direction is determined by emotional traders. Remember Warren's rule number 1: Never Lose Money. If you are unable to get out of some trades this round, its still ok, you'll get another chance to buy at cheaper price, build up, and sell in the near future.
*Last note on Gold/Silver or the ETF GLD/SLV, looks like Gold and Silver prices are breaking down. GLD has broken the support @ $150 last friday and last night traded even lower near $130 region. This is a critical support level for GLD, if it closes below $130 today, there is high possibility we will see further correction to mid-2010 levels in the region of $120. Similarly for SLV, made an error picking it up @ $29. It is now trading at $22.09, it this continues, we will see it reaching pre-2011 levels around the region of $15-$20. Its good for those vested in SLV, you can pick up equal portions at almost 1/2 price.
China also reported a slowdown in its economic growth earlier yesterday, GDP growth fell short of analyst's estimate, 7.7% vs 8%. I personally do not feel it is something to worry about because Chinese stocks are still undervalued and slow growth is better than no growth at all.
In Europe, ECB president is now saying that monetary policy is insufficient to resolve the root causes of the debt crisis and will require government reforms. (Duh!) If you think the economy can be artificially stimulated to grow without each government actively controlling their spending, you are mistaken.
Anyway so what happens now? Is it time to take profit? I am not so worried about the 'emotional' market situation but more so because i might not be able to hit my target prices on some counters and get out in time. Ultimately market direction is determined by emotional traders. Remember Warren's rule number 1: Never Lose Money. If you are unable to get out of some trades this round, its still ok, you'll get another chance to buy at cheaper price, build up, and sell in the near future.
*Last note on Gold/Silver or the ETF GLD/SLV, looks like Gold and Silver prices are breaking down. GLD has broken the support @ $150 last friday and last night traded even lower near $130 region. This is a critical support level for GLD, if it closes below $130 today, there is high possibility we will see further correction to mid-2010 levels in the region of $120. Similarly for SLV, made an error picking it up @ $29. It is now trading at $22.09, it this continues, we will see it reaching pre-2011 levels around the region of $15-$20. Its good for those vested in SLV, you can pick up equal portions at almost 1/2 price.
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