I wish I had good news

For weeks now I have been writing that I suspected that the sub prime problems was not over and it would spread. And unfortunately that prediction has become a reality. If ever I wish I was wrong on a call I wish I was wrong on that one. But my call was spot on. The sub prime meltdown continues to spread.

And what makes trading for us even worse is that we appear to be on the way to a recovery (like yesterday morning) and then something else happened that sends the bulls running out of the building.

Now we wake up this morning to even more (and possibly more substantial) news of spreading credit crunch problems and the European banks having to pump money into the system to maintain liquidity. This news sent the bulls in our markets now digging a hole and hiding their heads trying to get away. Wall Street is completely over run with bears today. They are running through all the sectors breaking everything they get near.

In all my years of of being involved with investing and trading I have never seen a market that has been so volatile and so nervous. I want to be able to say we are doing great and like the old days in TV when breaking news hit they would say "We now resume our regular television programming".... I wish I could say that to all of you fine RebelTrader readers. Unfortunately the problems just keep getting worse. And the reason they get worse is because we don't know where it will end. One day a financial expert says "the sub prime is contained". And then days later we learn it is not contained and has spread. Then we keep getting additional news tid bits from mortgage companies, home builders, etc. that conditions are getting worse.

One day I hope my headline for a future post will be "We now resume our regular stock trading routine". But right now it appears that will be a ways away.

What is frustrating to me is that it is even difficult to short these reactions because one day we go up big and then the next day were down big. Can't swing trade those moves. The only people making money right now are day traders. And day trading is for professional traders. If you are new to the markets and/or just getting started with swing trading then you need to stay far away from day trading. Once you master the markets and swing trading over time (and I will help you all do that) then you can advance to doing some large money day trades. But for now best thing to do is to just stay clear of this and not try to get in it. It would be akin to crossing a 10 lane Los Angeles highway at rush over. You would surely be run over.