The different between concern and DOUBTS
Last night, 20May 2010
The Dow dropped 376.36 points,3.6% to 10,068.01.
I asked what is the reason that driven such a panic?
checked the news as below;
May 21 (Bloomberg) -- Stocks around the world plunged and commodities slumped as reports cast doubts on the strength of the U.S. economic recovery and European leaders struggled to contain the region’s debt crisis.
I found the key word is: DOUBTS.
The market is doubtful, but all these news already been
well-spreaded since before now, about a month ago.
In fact, I had told myself to go short (DIRECTION, 21February 2010).
The similiar recent PAST panic;
2008 OCT 10(Bloomberg) - Stock tumbled, driving the MSCI World Index to its worst week in more than three decades, on concern the deepening credit crisis will spur the failure of more financial companies and send the flobal economy into recession. The MSCI World Index lost 3.4% to 925.18.
The key words are; on CONCERN the deepening credit crisis.
What impetus driven the last night panic;
Firstly, I think the market is over sold.
(1) The recent crisis is still fresh in everyone head, exaberting the panic, a completely knee jerk jittery upon any "unusual dropping".
(2) Any bad news last night? No, but DOUBTS.
Please be reminded, the world economy is on the recovery path.
Simultaneously, the interest rate is at the historical low. The world is flooded with cheap liduidity, searching for asset-classes that meet its' criteria to stay.
I would be trading against the stocks' dividend yield, high yield stocks would be on my shopping list for short term trading. AGAIN, I THINK THE MARKET IS OVERSOLD.
Back to the advice from the world's richest man;
Be fearful when others are greedy, and be greedy when others are fearful.