Accident?
So just when you think your stocks are doing OK in a ho hum market, a plane goes and hits a building. Well that sent markets into a tailspin. It looks like they are trying to recover but they may not make it before 4:00pm. I don’t want to make light of the situation or any casualties, but this incident illustrates the way the market reacts to events.
If you look at the chart you can see the knee jerk reaction as the market dives. When the dust settles, they are thinking that the crash is an accident. The more it begins to look like an accident, the more the Dow recovers. Now if you were a day trader, it would be a perfect opportunity for you to buy. Now the gut reaction is that it is terrorism, especially with North Korea on everyone’s mind. But when you look at the circumstances terrorism is a good knee jerk reaction. I can’t blame the markets for selling off, but I know people capitalize on things like this.
If you look at the chart you can see the knee jerk reaction as the market dives. When the dust settles, they are thinking that the crash is an accident. The more it begins to look like an accident, the more the Dow recovers. Now if you were a day trader, it would be a perfect opportunity for you to buy. Now the gut reaction is that it is terrorism, especially with North Korea on everyone’s mind. But when you look at the circumstances terrorism is a good knee jerk reaction. I can’t blame the markets for selling off, but I know people capitalize on things like this.
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