Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
From investopedia, "After capitulation selling, many traders think there are bargain buying opportunities. The belief is that everyone who wants to sell a stock for any reason, including forced selling due to margin calls, has already sold. The price should then, theoretically, reverse or bounce off the lows. In other words, some investors believe that capitulation is the sign of a bottom."
You posted that yesterday and I thought it was quite a good post, well worth repeating.
I hope capitulation is sort of like you can't describe it but you'll know it after it as happened. If you realize quickly enough you could make a great profit.
I haven't seen anything that looks like capitulation yet, and I doubt it will happen this year.
you don't call this capitulation? what is the difference.. is it volume?
There are still a lot of people on the fence, should I get out or should I stay. We saw a bump today followed by mass selling again. There are still weak hands in the market. The little green we saw today was enough for them to get out.
The market needs to go down until all those people have jumped ship. For that to happen, it needs to go down more, so when a bounce happens, we see people buying thinking the blood is over, all the weak hands are out, so these prices are now bargains. High volume is a sign. However, knowing when capitulation happens is more hindsight. Once it happens, you can then say, okay around this date was the time the last weak hands exited the market.
If this doesn't end up being a crash, I can imagine it happening soon. We have had 3 days in a row with mass selling volume. We want to see mass buying volume.
From investopedia, "After capitulation selling, many traders think there are bargain buying opportunities. The belief is that everyone who wants to sell a stock for any reason, including forced selling due to margin calls, has already sold. The price should then, theoretically, reverse or bounce off the lows. In other words, some investors believe that capitulation is the sign of a bottom."
Excellent post. Not sure where I fall.
CRM is a perfect example. Sold at $130 making a little bit. Watched it drop to $120 and felt great. Then up to $140 brought angst. Now back to $122. I think Salesforce is a good company that might realistically be a $100 stock.
The market needs to go down until all those people have jumped ship. For that to happen, it needs to go down more, so when a bounce happens, we see people buying thinking the blood is over, all the weak hands are out, so these prices are now bargains. High volume is a sign. However, knowing when capitulation happens is more hindsight. Once it happens, you can then say, okay around this date was the time the last weak hands exited the market.
Actually it's the mirror image of what happens when a stock peaks. If only we knew that day in advance we'd be rich. But it was only later we realized we weren't one of the lucky ones who sold at peak.
Quote:
Originally Posted by bmw335xi
If this doesn't end up being a crash, I can imagine it happening soon. We have had 3 days in a row with mass selling volume. We want to see mass buying volume.
Depends on what you mean by soon. I don't see anything good happening within weeks unless it's a bump up on the last two trading days of 2018.
I don't see any way for 2018 to end well for any of the major indexes.
Actually it's the mirror image of what happens when a stock peaks. If only we knew that day in advance we'd be rich. But it was only later we realized we weren't one of the lucky ones who sold at peak.
Depends on what you mean by soon. I don't see anything good happening within weeks unless it's a bump up on the last two trading days of 2018.
I don't see any way for 2018 to end well for any of the major indexes.
Most stocks zig-zag either up or down. They usually touch the moving averages and then continue the trend. An up-trending stock doesn't go too far from the 20 day. However, sometimes a stock will takeoff looking like it's almost going vertical. In those cases you'd say it's over-extended, but you don't want to miss out on more gains, so you'd use a trailing stop. Once it comes back down to Earth, you'd wait to see where it finds support again and then you'd re-enter your position.
Stocks are more legit that crypto. However Ripple (XRP) entered NASDAQ market Jan 7. We might have lost a lot on stock market. But...
Since crypto adoption is coming I guess, are you starting to invest in crypto, are you investing already. Crypto market is down also. Market has crashed and do you thing this might be the time to enter crypto market?
I have currently started to educate my self and tried few exchanges like Kriptomat.io, Coinbase which seems to be very fast and easy to use, best thing is I can store funds in their wallet. But I would love to start trading on more advanced exchanges but em afraid of complex system of transferring the funds etc.
What do you thing? Will you switch the market or is this just a correction and the stock market will rise up again.
heck if anyone could avoid the worst days by just avoiding what they thought were the worst periods they would be as wealthy as buffett .
the problem is what many thought the worst period to be in stocks has been up to Christmas eve , yet it has already moved up 12% in 10 trading days .
so trying to avoid the worst times ends up usually missing the best days . those best days are really few . it is easy not to miss the best days , just don't think you are going to time things to miss the worst days
Last edited by mathjak107; 01-08-2019 at 06:40 AM..
heck if anyone could avoid the worst days by just avoiding what they thought were the worst periods they would be as wealthy as buffett .
the problem is what many thought the worst period to be in stocks has been up to Christmas eve , yet it has already moved up 12% in 10 trading days .
so trying to avoid the worst times ends up usually missing the best days . those best days are really few . it is easy not to miss the best days , just don't think you are going to time things to miss the worst days
I admit I have lost money trying to catch a falling knife too many times. But I get out of my positions again when the pain keeps getting worse. Now I am mostly out but I am very frustrated. I cannot seem to get anything right (and I used to have the magic touch).
It has been a good two weeks - but one of the "best days" in late December was followed by a pretty bad day. IOW - they say that thing about staying in the market so you catch the best days. But overall it's still been a tough year and there is no guarantee it is over now.
I am seeing a few stocks break out to the upside of their trading range - a bullish sign, but I keep thinking we still have an index low that we need to retest.
I am just now trying to buy good stocks to hold at decent prices. It is very hard to "trade" this market. There are also things like wash-sales and fees working against day traders. It is better to invest - buy and hold. But there ARE times when it is better to just get out, 2008 being a very good example.
heck if anyone could avoid the worst days by just avoiding what they thought were the worst periods they would be as wealthy as buffett .
the problem is what many thought the worst period to be in stocks has been up to Christmas eve , yet it has already moved up 12% in 10 trading days .
so trying to avoid the worst times ends up usually missing the best days . those best days are really few . it is easy not to miss the best days , just don't think you are going to time things to miss the worst days
I don't disagree with this.
What I'm saying is that some people don't realize or grasp the amount of risk you're putting up for relatively smaller gains.
Let's say you ride out a crash similar to 2009.
So, you may be down at one point perhaps 30-50% of what you put in, and you're just banking on the fact that it will recover. It might recover for 25 years, or maybe if something crazy happens it never recovers. Of course, you probably have bigger problems if something like that happens.
So, it might be worth it to sacrifice some gains to prevent massively losing your shirt.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
