When the Dow slips like this, many people stick their head in the sand. But for the predator traders out there, this may be the best time to pick favorite stocks with strong fundamentals and technicals up for a nice discount from previous days action trading.
Thursday and Friday were great trading days and up until Monday afternoon, the trading action was fantastic. Then things started slipping and today (Tuesday) the Dow was down firmly between 60 and 199 points. Which translates to stock prices dropping. This was a perfect day to sit back and diversify your holdings with a number of stocks at a better buy point.
This is why some advise that you do not take part in pre-hours trading in order to see where the market is heading. This can prevent a trader from buying only to see their stock price drop after the opening. However, if the Dow will be moving up that day; pre-hour trading can get you into a stock before the heavy volume buying begins. Its considered a crap shoot by many, so the best you can do is to go with your gut. Jump in early for high risk/reward or patiently wait to see were the market is heading before buying and catch a better deal.
Still others will rely on their systems to tell them when to buy. Systems can provide better educated guesses, still however systems will have bad signals and you'll loose some percentage of the time, so be prepared to take a bath now and then. The market has history and history has spawned systems which are plentiful and come with a nice price tag. The market holds experiences along with history and those who have time to watch, study, and gain experience of their own will use this and their gut to make buy/sell decisions. The rest is up to lady luck!
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