Stage One Completed
9:30 a.m.  The U.S. stock market opens. The news on the wire is that Vice President Cheney survived a suicide bomb attack in Afghanistan. The Shanghai stock market had crashed overnight, with a nine percent loss. The U.S. market inches down to about a 200 point loss. The day traders were selling but the institutional investors were not. The institutional investors are the managers of mutual funds and hedge funds, who have millions of dollars at their disposal. These are the people that control the market.
2:59 p.m. Within thirty seconds, the market sold off astronomically, from a 200 point loss to a 500 point loss. The institutional investors finally made their first move of the week. Their first move of the week you ask ? In order for the U.S. market to equal the losses of the Shanghai market, it would have to lose 1,000 points. I honestly think that it will be Friday afternoon between 3 pm and 4 pm before we see the final outcome of this much anticipated, media created, market correction. Today was just stage one of the process.. At one point this afternoon, the market had dropped by 546 points. At the close, a few scavengers ( including myself ) had bought enough cheap stocks to bring the overall loss of the day to about 400 points.
Unless the market goes down another 600 points between now and Friday, I plan to wait until 3pm Friday to buy any more equities. If I play my cards correctly, my financial goals for the year could be met by the end of the year. Just in case my strategy is faulty, I accepted a new guitar student, who begins on Thursday and will supplement my income for the year. And speaking of guitar …
In a recent diary entry, R.F. explains right hand guitar technique in a way that increased my understanding of the concept. He described it as a release of the necessary tension that is needed to hold the pick still. ( actually these were not his words, only my translation of them ) But I now understand a down stroke of the pick as a release of tension in the wrist, with an upstroke as being a return, a relaxed return. My thanks go out to R.F. !
Covering all bases,
I.C.