ChartAdvisor.com advises investors to be cautious. It believes there is a chance of near term bounce and the stocks are cheap in long term views. But the markets will take some time to stabilize.
Schaeffersresearch.com: The 2nd part of this post is interesting. It shows historically, the markets tend to be volatile and negative in 1-2 months following such a big crash. But in 3-6 months term, the bounce is greater than average.
My take: Wall Street goes through this type of volatility several times a year, although the degree of volatility varies each time. SP500 fell from 1217 on 4/21/10 to 1028 07/-06/10: a 15.5% drop in 76 days. Just one example: SP500 fell from 1345 on 07/22/11 to 1199 on 08/05/11: a 10.8% drop. We have been through this before and the markets recover. Point: unless you face a margin and are forced to liquidate your positions, you should hold on tight and NOT to sell at this very low price levels. Actually, I advise to add positions during such a panicky period. The time to make real money is exactly the times like this one we are in the middle of. Of course, I always use covered call (simultaneously) when I add new positions. “This too shall pass”.
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