Catching a Falling Knife ( or Falling Safe )

Re: Catching a Falling Knife ( or Falling Safe )

Postby OE2008 » Tue May 25, 2010 5:16 pm

We are in bear market territory. Most major indices are now trading below the Feb 2010 low; Dow, Spx and Nasdaq would most likely confirm tonight. Dax and Kospi are still holding up.

When in bear territory, not the best of time to be cute.
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Re: Catching a Falling Knife ( or Falling Safe )

Postby kennynah » Tue May 25, 2010 5:20 pm

If one truly believes this is a sustainable correction, there's no reason not to go Short but if there's hesitation, u need to ask "why?"
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Re: Catching a Falling Knife ( or Falling Safe )

Postby winston » Tue Oct 05, 2010 3:27 pm

Nowadays, when I'm very tempted to catch a falling knife and being afraid of missing the boat, I would pull myself back one more day and see how it opens.

Or if I still cannot resist the urge, I would buy 1/3 my normal position..
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Re: Catching a Falling Knife ( or Falling Safe )

Postby winston » Fri Nov 12, 2010 7:55 pm

TOL:-

So did you try to catch some falling knives today ?

SSE was down > 5% and some of the HK stocks were also down 5% to 7% ..

What are you afraid of ? Didnt they tell you that QE2 will last 8 months and the money would be flowing very soon ?

Isnt China raising interest rate a good sign ? That shows that the economy is strong.

If you are not going to be buying on dips, then when would you be buying ?

Hmmm.... maybe the reason why you are not buying today, is that you are fully invested and dont have any cash left to buy :P

Or are you afraid that the Dow will drop 350 points tonight ? :?

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Re: Catching a Falling Knife ( or Falling Safe )

Postby winston » Tue Feb 08, 2011 10:31 am

If you want to catch a falling knife, dont catch it too early in the morning.

Catch it just before the market close for lunch or before the end of the day.
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Re: Catching a Falling Knife ( or Falling Safe )

Postby winston » Tue Feb 22, 2011 2:55 pm

So tempted to catch some falling knives today.

However, sentiments are extremely negative today so it may be better to wait a bit more ...

My instinct is telling me that the selling is due to short-selling so they may cover at around 3.30pm. Let's see ...
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Re: Catching a Falling Knife ( or Falling Safe )

Postby winston » Tue Jun 28, 2011 3:18 pm

Not vested

DJ MARKET TALK: Lesson From Nine Dragons Paper, Yurun Debacles

1447 [Dow Jones] One lesson investors perhaps can learn from the China Yurun (1068.HK) debacle is that when deciding whether or not to bargain-hunt a stock that suddenly dives, a critical factor should be whether or not investors know for sure what's causing the stock's fall.

Yurun's 19.8% share-price plunge Monday is similar in magnitude to Nine Dragons Paper's (2689.HK) 17.4% tumble on June 14, but with the major difference being that the reason for Nine Dragons fall was immediately known at that time--S&P withdrew its credit rating on the company.

Yurun, on the other hand, was mauled on market chatter. In NDP's case, investors can rationally makes an assessment of a credit rating withdrawal' impact on DNP's business fundamentals. NDP rebounded 13.8% on June 15.

Yurun is still down 3.7% at HK$19.84, at today's intraday low of HK$18.80, Yurun fell another 8.8% vs Monday's close.

Source: Dow Jones Newswire
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Re: Catching a Falling Knife ( or Falling Safe )

Postby winston » Fri Aug 05, 2011 8:22 am

With the 512 points drop, are all the weak-holders scared out of the market already ?

If so, isn't it time to catch some falling knives ?

Or are the weak-holders scared stiff but still in the market, waiting to sell into any technical rebound ?

Or maybe the weak-holders never came back into the market after the Lehman Collapse and you are now actually trading with a machine ? :?

If that's the case, what would be on the mind of a machine ?
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Re: Catching a Falling Knife ( or Falling Safe )

Postby winston » Sat Sep 10, 2011 7:56 pm

TOL:-

How does one try to catch falling knives ?

Wait for it to touch the floor first, vibrate a bit and then only pick it up ?

Or try to catch it in mid-air, hoping that it would touch the ground soon and then bounce 50% very quickly ?

My rule of thumb is to wait for it be be cheap and then wait a bit more before initiating a small position, to follow the story. However, this has cost me some good opportunity because if you dont act fast, others will.
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Re: Catching a Falling Knife ( or Falling Safe )

Postby OE2008 » Sat Sep 10, 2011 10:04 pm

OE2008 wrote:We are in bear market territory. Most major indices are now trading below the Feb 2010 low; Dow, Spx and Nasdaq would most likely confirm tonight. Dax and Kospi are still holding up.


We are now in bear market territory again. Now DAX and KOSPI have joined in the correction. Will Helicopter Ben come to the rescue again with another round of QE3 to prop up the market.

With or without another round of QE3, when would be a good time to pick up bargains? Studying past charts of 2002 and 2008, RSI(14) going under level 30 in weekly charts for consecutive weeks may be good time to bargain hunt blue chips IMO.
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