Trading Thursday

I have spoken to a couple people this week who have checked their retirement accounts and were surprised at how much they were down in a short period of time. No doubt this asian contagion has caused some losses for even passive investors who never "trade" or "speculate" but simply own mutual funds and watch them grow over time. The only people happy about the last couple weeks are those who were short, which is a tiny minority of the market. Most retail investors have never been short a stock and most don't even know what it means.

The market is a discounter of future events. Prices today reflect what the mass of "voters" think will happen 3,6,9, 12 months into the future. Right now today, the dreaded "R" word, recession, is in the backs of peoples minds thanks to our former Fed Chief, Alan Greenspan who actually uttered that word a week or so ago. While I don't personally think that is going to happen, I am taking note of the possibility and this coupled with much higher volatility am less invested today than I was a couple weeks ago. My Average True Range calculations, (the range of a stock over a given time period, say 14 days) have gone up considerably and this means to me that I take smaller positions.

I like the price action in GR and will continue to buy this on dips. I don't like the price action in INTC and am concerned about its weakness. Will use rallies here to get out of some leaps I bought not so long ago. I continue to watch and wait, wanting to see more basing action before getting too carried away on the long side.

Appears that market sentiment dropped pretty hard in the gold market over the last week after its big drop. I have used that weakness to re-build a gold position. Good article on this here:
http://www.marketwatch.com/news/story/gold-timers-throwing-towel-bullish/story.aspx?guid=%7B42316B45%2DE3B7%2D4DFB%2D99C7%2D77A4379FD3F4%7D

The chance of another drop is still high, and thus I am keeping some cash around for if and when this should happen in order to take advantage of cheaper prices. In the meantime, today looks like it will open higher. I am reminded that markets tend to open strong and close weak in bear markets. Tuck that away and ponder that as you watch the price action over the next few sessions.