Are these Historic Times for traders?

[bryanmcn]

With the DOW down almost 40% from its highs its easy to think that we are doomed and all is lost.

How many remember 1987? To put things in perspective;

 - The DOW lost 20% in one day on Oct 19th 1987! but from Oct 18th to Dec 31 1987 the DOW gained 11% and ended the year with posiive gains.

How many were trading in 2000?

 - I was trading during the "dot com bubble" of 2000. By March 2000 the Nasdaq had gained 100% in one year! I had amassed a small fortune and was telling my wife we would be millionairs by year end. I was seriously thinking about quitting my job to day trade. Instead I lost half of my portfolio in 5 months. By mid 2003 the Nasdaq was at 1500 - a 70% drop.

 -  If we are to learn from the lessons of the past, we should watch and ready ourselves to buy low. The question is not when is the low, the question is where will the DOW be a year from now?

 - Don't get me wrong. I see further lows but watch for that BIG washout. "Big" these days is over 6 or 7%. When the DOW hits around 7500 I'll be buying.

[garilou]

Hi Bryan,

Are these Historic Times for traders?
Supposedly the worst was in Holland in the 18th century when they had their "tulips bubble!"

Fun only for those who trade in both directions, and very quickly!

Yes there were other bubbles and crashes. This one was a little more "vicious": it's hard to find THE day when it crashed

I also made a lot during the "dot com bubble".
For reasons having no relation to the markets, I got totally out, somewhat frustrated seeing the (net yet so called) bubble going up, me not being part of it anymore. Then it exploded, and I kept my tripled portfolio intact: no glory for my trading skill.
But we went for a small 3 days trip, and when we came back, my husband, who was just starting to trade, had lost a huge amount, and found those 3 days had been terribly expensive!

Now when you say: "we should watch and ready ourselves to buy low" , I am somewhat sceptic.
When I look at the way the market goes from 9:30 till 4:00, my feeling is that lots of people are trying to guess that the low has been reached, like you do: you set your low for the DOW around 7500. Your crystal ball again?

It goes in both ways: I shorted IBM, then suddenly thought, it's low enough, covered my position, was happy with my ~$400.00 gain after having been in loss for a few days. They say "no one got ever ruined by taking small gains"...
What happened? It's still down more then 5 or 6$.
Sure I do get through emotions when a long searched short prospect starts to climb around noon,
But after many days, I'm getting less and less nervous with my shorts portfolio: the day will finish lower!
It's not a matter of "day trading", now, it's really a matter of a "couple of hours max trading".

You see no support anywhere, neither for most of the stocks, still less for the indexes.
So for my part I do not think that "get ready to buy low" is a good idea: better buy somewhat higher, and safer.
I'll wait till supports have been tested many times, and resistances broken.

Louise   

[bryanmcn]

Technically the DOW shows long term support at around 7500.