panic selling, page-4

Still Holding, " absolutely"..!!! Well that's a wise decision IMO.. Now that you've made it, without any external input, i will try to answer your original question to the best of my ability..i.e..." panic selling,, is it justified ? ""

The short quick answer, is that it's not actually a panic sell, but a well controlled and programed sell off, initiated by a "trigger",,, and any sort of justification is irrelevant,, because it does'nt feature in the equasion at all !!

I can't speak about the other sectors, like Industrials and Bio-Tec, etc., because i never deal in that area. But with resource stocks, and the speculative end in particular,, the top 17% to 18% of the SP level is always controlled by the "" short margin, volitile traders ""..
The margin varies,, but it's usually on a 2 to 1 basis..i.e. They hold for say 10% profit,,but install an automatic " conditional order stop loss " at 5% under the buying price.
This means that they can sustain 2 bad decisions for every 1 good one,, and the end result is even !!!

Collectively,, it's these traders who are responsible for the SP fall back..!!
Now,, you might not like these guys-----But i do..!! Because they are the ONLY traders who can move the SP northwards !! You ,, Me,, and the other blokes here,, We can't move the SP,, Not even a cent..We've already had our buys, and we're sitting--holding--and waiting,,, effectively doing nothing.!!

These small margin traders, on the other hand, are specing the SP, and progressively moving it in small increments. HOWEVER....They don't trade on a companys fundamentals, they trade on mathematical technical indicators, associated with the SP movement only,and then remain vigilant for any bad news--""Trigger ""

Their knowledge of a companys fundamentals is NOT intimate,, it's general overview only. They don't have that sort of time available.. You can get " stock picker programs", where you feed in the indicators that you want considered, and it'll pump out 30 or 40 companys daily, that can be speculated on.
It's not possible to stay current with all fundamentals on every company..

The 'trigger' for this sell off was undoubtedly the P & A on Lonesome Dove.. BUT for those of us following closely,, it was very OLD news..!!
It was announced as a suspension on the 8-1-2007.. On the 7-3-2007 it was announced that "" as far as the gas was concerned "",, it was too far away.
They were testing the oil show,, only because they were already there, but in reality, if that was commercial, then it would just have been a Fluke.. After all, they were drilling for gas, not oil. !!

This P & A was no supprise to us, and if lodgic applies, then the SP fall back should have happened on the 7-3-07,, NOT two weeks later !!

When this kind of trigger happens, it takes on a momentum all of its own.. Each 1% level represents a 5% level for somebody, because they all bought at different levels on the way up, which gives the whole syndrome a continuous overlap..

It stops when all these traders are shaken out of the top end,, and thats when you'll see the volumes drop off..!!
I personally use an average of the 5 days SP level prior to the trigger, then subtract 17% to 18% from that figure,, and then watch for the volumes to drop off at the new level..
Nothing is guaranteed where the market is concerned of course, but when applying this to the resource sector,, i've found it to be a good indication,.!!

Your buying level was under those figures, and always looked safe enough to me !
On the next piece of positive news, the SP will begin to rise and the whole cycle begins again.
WE will get another sell off in the SP journey,, probably on the next P & A,, as we're bound to get one, sooner or later.
The development wells are dependable, but it's too much to expect that every exploration well,,, will be a winner !!
The fundamentals are beginning to compound now,, so the next sell off will be at a much higher level.

Lets remember ,,, that we are talking about a "trigger" and NOT a catastropic event !!!!

A catastrophie, is the likes of which we have seen recently with BDG--" Bendigo Mining ""... and BMO-- " BMA Gold ""..
When this happens, a 5% stop loss is USELESS..and just won't save you..!!
You can't type a sale into your computer quickly enough, before the que jumpers just roll over you..
It's pandemonium Pluss...!!
The volumes soar into the tens of millions,,
The SP declines in multiple 10% increments with a single sale.!!

This is the genuine definition of " panic selling""

If you ever get caught up in one of these things,You'll know that you're standing in DEEP manure without gumboots..!!

I know that there's people who will disagree with all of the above,, but i could'nt care less, i'm not takling to them ,, i'm speaking with you.. !!

I apologize for the long-winded answer Mate..,,, But it's difficult to condense this stuff and maintain cohesion..!!

Good luck to you " absolutely ""...