As stocks began the early 2016 meltdown, I stopped out of many positions and watched. My favorite screens showed few stocks of interest. The downtrends and overhang were too daunting. Somewhat stung by the downturn and change in market behavior, I tracked what was working instead of actively buying and selling.
Almost nightly, I continued my normal screens for growth, margins, and flags. I added additional screens for large caps, perhaps as a safer play vs. smaller companies, but still targeting positive financials and technicals. I separated all of my ideas into speculative and defensive.
During this downturn, my defensive ideas played out well. Some did not work, but a majority ran higher rather quickly. My speculative ideas were less fruitful. While I didn't buy new positions during this time period, I realized that what was working was working. Good setups quickly turned into 5-10% moves.
The lesson for me is to keep hitting the gas pedal. When I know what I know, I know what to do. While the overall market affects all stocks, attractive financial and technical aspects should always attract buyers. Market action for defensive and speculative stocks may depend on the market's desire for risk.
I've consistently learned I want to be early on stock moves. I need to keep this perspective, whether the market is climbing, topping, or bottoming. The desire to act must always be present.