Subprime is threatening to take every stock in its path down. It’s August. The financial media outlets can’t figure out what the market will do tomorrow. Rumors and weather pattern changes are causing stocks to plummet and turn on a dime. That can mean only one thing. It’s a great time to trade.
Call me crazy, insane, out to lunch or perhaps brilliant, but I love this market. It’s better than finding out that you’re the next contestant on the Price is Right. Come on down.
Traders love volatility and this market is serving it up like a grocery store with an overstuffed freezer full of meat that’s about to go bad.
Some stocks are showing similar patterns over and over. Others are bobbing up and down. Rumors? How about Beazer Homes USA (Symbol: BZH). Yesterday, on a wild rumor, the stock nosedived to $8.10. Then the alarms went off—buy, buy, buy.
The rumor was quickly squashed, and the stock rose up. Today, one day later, it closed at $13.04—about a 60% gain.
How about American Home Mortgage (Symbol: AHM)? I wrote about it two days ago (American Home Mortgage Implodes). It dropped 90% and closed at $1.04—down much lower at one point. In swept the traders willing to gamble.
Today, it closed at $1.45, but at one point it was up near $4.44. Traders were able to come in and make large gains quickly.
Smaller 2-3% gains can be had all day long across the board.
Let me close with a word of caution. While it might be feeding time for some, most should be extra careful. Amateur and underfunded traders can quickly get eaten up in this market.
If you’re an investor, this is a great time to shop around. It seemed like just a week or two ago I was hearing that it would be a dream to see Goldman Sachs (Symbol: GS) under $200.
Yes, Virginia, there is a Santa Claus. Goldman Sachs closed today at $187.46.
My name is Jason A. Martin. I'm an investor/trader and financial writer. This is my blog. I also run a site dedicated to currency trading at CapitalistNation.com. If you'd like to follow me on twitter, here's the link: Jason A. Martin If you need financial content (articles, newsletters, eBooks, etc) for your site, publication and/or business, go to FinancialWriter.org (my service) for more details.
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My name is Jason A. Martin and this is my investment blog. Back in Jr. High School I fell in love with an electrical wiring company's stock on Wall Street. After following the stock daily in the papers—the Internet wasn't around back then—I sent them a letter and they sent me back all sorts of wonderful information about their company.
In High School, we had a stock market contest. All the kids were picking companies that made stuff they consumed. When I announced my beloved company, I was laughed at. Little did they know that my company was going to be the subject of a takeover soon.
Long story short, I won the contest and have made money in the stock market, through real estate investing, currency trading and so forth.
I hope you enjoy Financial Rebel. If you do, please leave your comments and share this site with those you know. I also run a currency trading blog over at CapitalistNation.com.
Jason
3 Comments
This is absolutely the type of market for a trader. I can’t disagree with you much though, it is pretty fun seeing stocks move the way they have of late, though eventually I’ll want the trend to be bullish.
Aaron
8/2/2007
This has been a great time for me personally. I love the volatility.
It’s not for everyone though. You’ve got to pick and choose your battles.
Jason Martin
8/7/2007
While I do not love the volatility, it does allow me to buy-to-close some of my positions that I have sold secondary calls on. I would prefer an upward trending market so I could get called out of my positions more quickly.
Dustin
11/16/2007
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