Ooopsy... it's another down day!
by, 8th-July-2009 at 12:25 PM (894 Views)
BHP stock price has lost more than 20% since its peak in early June, now it's not that big a loss at this point yet, but if it begins to lose another 20% or so in the next two quarters, that will begin to hurt, esp for those who bought in during its run up from May to June.
Will that happen? I mean BHP losing another 20% from the current 31+? I dunno really but frankly by it losing another 20% would only translate to this - it has taken a round trip back to its Dec low last year. No big deal since in this game, there will always be winners and losers. It will be tough for some but easy money for the other.
Such is life!
But could BHP really drop back that low? Well, here's the bit about economy vs the market, you see. The economy is not the market and the market is not the economy... but sometimes they overlapped. And the connecting glue is? Money! Or liquidity. The market is about fast money whilst the economy is about making real money. Fast money runs fast hence the market is always running ahead of the economy, does it explain the intricacy?
So BHP at 31 is what the market has ordered - the smart money and big instos are doing what they are required to do, they discount its stock price back to be closer to its economic reality. The question here is simply this - does 31.00 reflect economic reality of BHP money making prowess?
Dunno really, coz different people have difference perception. They have this freedom to choose what they want to believe in, esp the stock market. If it's hard to convince others that the market is due for a drop because of economic reality, it's equally hard to tell them the correction may have more to run.
...just watch, more stop loss will be hit. Soon. But do you have to wait for it to happen before you pull the plug? Sometimes you don't, really if you try looking ahead with some other trick than just plain TA... trick like FA or big picture view to gauge the bigger trend that is happening way above your universe. The trick is to discern what is important and what is not... but then again, it will be hard to convince others of things they have not tried before.
Just like the grand old Pope at one time... those who tried to show him the earth is actually round were persecuted.
See? Living a flat earth is that much easier to explain so many things people don't understand... that makes life that much easier,