The Stock Market Fell Yesterday — Head for the Hills!…er, Nevermind (01/14/14 evening update)

 

(01/14/14 PM)  The U.S. markets rebounded nicely today.  I expect them to pull back to yesterday’s lows again, this week.  This could easily be a brief correction, and it will be more clear in a few days.

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(01/14/14 AM)  The U.S. stock markets experienced a pullback during an uptrend yesterday.  The S&P 500 and the NASDAQ dropped to short-term support levels, but the Dow can easily fall further before hitting support.

Here’s how I handle these pullbacks.

1. If I don’t get stopped out of any of my stocks, I completely ignore stock market pullbacks.
2. If I get stopped out of more than one stock, I get excited at the opportunity to “buy low” in the near-term.

• I don’t ever review the subsequent price action of the stocks which I got stopped out of.  Of course they are “great companies”!  But my goal is to make money, not to fall in love with my stocks.  I stick with companies which have strong chart patterns today, not the ones which had strong patterns several weeks/months ago when I purchased them.

3. If the market clearly bounces at short-term support levels, I buy two kinds of stocks:

• stocks which have bounced at their support levels, and are still low,
• or stocks which didn’t fall with the market correction.
• I never buy stocks which have fallen through support levels, because it’s going to take them a lot longer to rise than the two types I just mentioned.

Feel free to send questions about stocks to research@GoodfellowLLC.com.   I CANNOT legally advise you what to do with your stocks, but I CAN tell you what I would do with those stocks.

Happy investing!

 

Crista Huff

President

Goodfellow LLC

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