Situations like this as a contrarian trader are dangerous. I have found that going into a situation where you are unsure of the reason or motivation of the movement of the stock is fraught with insider information that the public has no access to. And as we are not insiders, we can be taken along with the rest of the public. Instead of having an edge as a contrarian trader trading against the emotions of the masses, we lose our edge as we become one of the suckers. Possible reasons that the stock dropped today:
1. Market Maker Manipulation: The MM's are shaking the tree trying to get more volume
2. Big Funds dumping then planning to get in when lower incrementally
3. News coming down the pipeline that only the insiders know
4. Hold on the rumor and sell on the actual news
We just do not know. And while this looks juicy, I cant get in on this because I simply do not have the facts. I cant tell if this is an emotional overreaction, because the obvious news behind this today does not make sense. I only get in when I am reasonably sure what is going on. If not, its like kicking a door in with a blindfold on and randomly shooting a few rounds into a room.
Other than that, I could not find a good bounce today. But this is just one day, and the above example is a good lesson. The QQQ is going to continue to rise and chop a bit and this site will let you know when it has reached its probable short term top.
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