Lately, it seems as if when the indices are down almost all stocks are down for that day - regardless of industry. I've noticed that the announcement of positive third quarter earnings has little positive influence on stocks right now. McDonald's beat Wall Street's estimates last Wednesday. What happened that day? In general stocks were down, MCD was up for maybe 1/3 of the day and it ended up trading down. What happened the day after? The stock was down. McDonald's has beaten Wall Street's estimates for the past three quarters. Yet, it has continued to trade lower. This shows that this is a day trader or short term trader market. It is very volatile out there. When you see giant banks like Bank of America, Goldman Sachs, and Morgan Stanley make 15-30% swings on non-earnings and little information, you can guess it's a result of a lot of random speculation. This doesn't mean it is necessarily dangerous. It just means, we have to be extra cautious. Take quick profits or if you are a long term trader, this may be a great time to buy.
In any case, I have added to my BAC position last Friday. I probably entered it a bit early, which is fine. I've missed big moves playing it "too safe".
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