Thinking behind the pull back

Market sells off today after the big mouth greenspan's warning against chinese stock market bubble. This sparked a sell off in chinese stock market and many chinese stocks traded in U.S. What do we need to do in such a situation?

Based on my painful experience, several points you have to be clear about include but not limited to,

1) What is the reason behind the move?
If just because greenspan' word, we don't even need to think too much. He mentioned 2 months ago that there is 1/3 chance the us economy will get into recession. Normally Stock market points 3 ~6 months ahead of the economy, however what happen? DOWS hikes about 1500 points, do we see recession? Recently he sent out too much warning message which he was not supposed to do after resignation. I really suspect that he was helping someone on the street or behind the street to do sth.
another news about the pull back is the coming back of the house market which would reduce the chance of FED to cut rate as we expected before. However, no matter what, cutting rate is just a matter of time this year, any short term thinking will still be short term thinking.
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copied from Yahoo
Investors were originally enthusiastic after the Commerce Department reported sales of single-family homes rose 16.2 percent last month after falling slightly in March. Although the average prices of homes plunged, the report still showed the economy continues to show signs of expansion.

The report followed data released by the Commerce Department earlier Thursday that showed sales of big-ticket manufactured goods posted a modest increase in April, indicating a continued rebound in business spending. The durable goods report suggested U.S. companies are in the midst of growing, and aren't afraid to spend money to do so.

With first-quarter earnings reports mostly over, Wall Street is placing increased significance on data as a catalyst for stocks. The reports on Thursday suggest that perhaps the Federal Reserve has steered the economy toward a soft landing, and that a rate cut might not be needed.

"Sometimes good is bad," said Scott Fullman, director of investment strategy for Israel A. Englander & Co. "This takes away the anticipation that the Fed is going to ease interest rates because of the housing market."

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you see what the people on street think? He said good is bad. hehe sound ridiculous ? no. All we are waiting for is the rate cut. A rate cut will be triggered when we see the house market tumble, when we see the economy slows down. You can see how conflicting of the psychology may affect the market.

2) was the move triggered by any fundamental reason of the company?
If the stock pull back because of the big market, nothing really happen to the Fundamental, don't be afraid. Just hold your holding. If it is because the fundamental reason like what we see in HMIN, a disappointing earning reason. We don't wanna hold loser for such kind of reason. But from short term trading perspectives, it might be a short term bottom.

3) What do we do with those original trading plan?
Today's sell off actually destroyed many of my trading plan including DXPE, OMCL, HSC . You can refer to the previous posts that I describe about their pattern. Under such kind of situation, I would have no choice but give up my previous plan. This doesn't mean I won't get in. Indeed, whenever I found a clear sign again, will get in right away. Holding fundamental sound companies can help to release your anxiety :)
As far as I know, the ISRG's breaking out pattern (traded by laoda yesterday)is also destroyed.
And it is a time to buy sth cheap. Don't wait too long, because once market comes back, will be strong and quick.

Just some of my ideas.

Also if you don't feel comfortable of holding good stocks, pls listen

No Sell Even Die

:)