Just a short post to remind myself and others that the trend is your friend, until it ultimately ends. That day has come in my eyes and we need to be ready for further selling in the weeks and months ahead. Sure we will see bounces and irrational moves both to the upside and the down. But I believe the overall trend is lower here for stocks, especially hotels, casinos, and of course airlines. I'm also not keen on banking or technology stocks here and would only be buying them at lower levels. The market overall is selling off across the board and the sentiment remains poor. Sure we are only about 10% off the highs, but in my eyes the market is just looking for an excuse to push lower. Gold has been shining as of late, but that is a crowded trade and I would be cautious.
What do you do here after years of buying the dip? I believe you have to be prepared to sell the rallies or you stay out of the market completely. If your a short term trader selling short stocks or buying put options on rallies makes the most sense. The current volatility makes me think we are going a lot lower in the coming weeks ahead. If you want to buy stocks for the long term it might be advisable to hold off for the time being. The market will become oversold at some point and quality stocks will scream value. I just feel we are not anywhere near to a bottom yet, so do tread carefully if your a buyer.