Strange things happen in the market

EPAM - They closed the day before yesterday at $66.40, and announced excellent earnings yesterday morning. I happened to look at their price during the morning and it was at $61.10, down $5.30 (about 8%). By the time I could raise cash it had moved up to $61.80 and I added a bunch to my position at $61.80 and $62.20. As I write, it’s back up to $65.10. I later discovered that it had earlier been as low as $57.40 (down $9.00 or 13.6%). I must admit that if I had first seen it there I would have been afraid to buy until it had started back up.

So what happened? I suspect a mutual fund or hedge fund needed cash urgently and had to liquidate at any price. That seems the best bet. Maybe they were short something which went the wrong way and they got a margin call. Just my guess.

PSIX - They closed yesterday at $65.10 and reported what I considered weak earnings and weak outlook this morning. I wanted to reduce my already small position but I was afraid they’d open way down. Instead I was able to reduce at $66.40 (up $1.30), before the market came to its senses. They are now down $4.00.

So what happened? I haven’t a clue.


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EPAM finished today up a little more - the market came to its senses.

PSIX finished today down almost $7 - the market came to its senses. Maybe too much, and tomorrow will see a little bounce off bottom?


So what happened? I haven’t a clue.


Short term moves are effectively random. If you are quick you can take advantage but since most of us are not looking at a ticker tape all day, we miss a lot if not most of them. One solution is to place good 'til cancelled (GTC) limit orders. Another is to get market alerts. My previous broker, Ameritrade, let me place alerts on specific stocks. Just this week I have been thinking of adding that facility to my Portfolio web-app. Computers make such good valets if we train them. :wink:

A few days ago I missed an opportunity to take profits for lack of such an alert which is what got me thinking about it.

Ray Kurzweil said that we don’t know how to think about things we have not thought about before. This is the reason for training so that we can react to situations instead of having to think about them when quick action would be the better move. For every position we should think about what we would do if the stock goes up or down a certain percentage. Then we can move quickly when it happens. And if we have a computer valet to alert us, so much the better. :wink:

Denny Schlesinger