Yesterday during the trading day I did an interview for Jim Goddard of www.howestreet.com. In it I tried to make the point that the high flying stocks like Tesla this month fell because they went up so much that they simply lost their upward momentum. They are now very risky and dangerous, especially the ones that fell over 20% and then barely went up yesterday. I know they bounced yesterday, but that bounce barely takes back their recent losses.
I told him in my opinion these stocks should be sold in order to move buy more safer steady gainers. For instance we had the worst stock market crash since 2008 in March. The S&P 500 fell over 30%, but the price of gold fell less than 16% and then gold went to new highs before the stock market did. The gold chart shows a simple pause happening now in its trend, instead of a manic dump like you have seen in so many stocks like TSLA.
On this recent pullback TSLA fell 20% in one day and AAPL over 7%, but gold and silver barely went down at all and many mining stocks such as Wheaton Precious Metals went through their highs of last week yesterday.
People like to chase stocks that go up the most and get the most attention on TV even if they are among the most volatile things to buy in the markets. It’s easier to buy steady gainers – stocks and ETF’s that don’t fall that bad as the wild stocks do when they drop and simply have stair step type action, like the current triangle pattern on WPM. I talked with Goddard about this and many other topics, such as the energy stocks in this interview.
Jim Goddard is great, hope you enjoyed out talk.
-Mike
