Posted by 7 January 2004

Feels Like Spring of 2000

The action is getting pretty nutty out there. But I have to admit that I’ve been enjoying it and doing my best to take advantage of all the activity. I had one trade today (thank you Briefing.com!) in EMRG that I bought at $2.05 and sold at $2.74 eleven minutes later, only to watch it race to 4.40 in after hours trading. All of that off of some news that may or may not be worth any gain at all. Not that I really care. :-) That type of action was reminiscent of the good old days during the bubble. I also heard a CNBC reporter mention that there has been a huge increase in activity in bulletin board stocks of late. The last time I heard that was spring 2000, right before the top. The idea being that once activity picks up in those stocks, speculation is running wild. I scoffed at that notion back in 2000, I won’t make the same mistake now.

Another thing that reminds me of the bubble days is analysts slapping aggressive price targets on stocks. Like today RIGL, a $19 stock got a $32 target, and AXYX, a $5 stock got a $15 target. There are a couple of these each day.

As for the broad market, it feels like it wants to pull back but every slight dip is being swarmed by buyers. The S&P 500 and Dow have made hanging men patterns the last 2 days. I’ll be watching for confirmation of those candles. Now if I could only find some good short candidates…

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Comments

  1. Posted by C. Maoxian on January 8, 2004 at 9:27 am

    It hit $5.29 this morning, pre-open. Feeling like a jerk yet? (Just kidding, buddy.)

  2. Posted by Michael on January 8, 2004 at 9:31 am

    I know, I’ve been kicking myself all morning :-(

  3. Posted by C. Maoxian on January 8, 2004 at 11:21 am

    Nah, there’s a new screamer every day… think long-term, keep things in perspective, stay mentally healthy.

  4. Posted by tom on January 8, 2004 at 3:57 pm

    Rookie question: How do you guys know when it’s safe to play a breakout like we’re in now?

    I’ve been waiting for the qqq’s to settle back to their 50day MA but this strategy is no good when the issue seems determined to keep going up.

  5. Posted by muckdog on January 15, 2004 at 5:12 pm

    If stocks are running away from you, your choices are to sit out or hop in. You can always hop in as long as you have an exit strategy should things turn for the worse. No reason to fear buying stocks. Just have a plan. Easy to say. A little harder to do with real money. LOL.

    I like to watch a few different sectors, so somewhere there is always a dip happening. Look at gold dipping now. Not sure where the buy is, but we’re closer to it today than we were yesterday!