A Quick Note About Trading
There are so many different strategies and ways to trade the market. The key is to know when the time is right for your strategy. When it's right, get aggressive. When it's not, scale back. The biggest challenge for many traders is to ACCEPT the times when the market environment is not favorable for your strategy. More importantly, having the discipline to scale back is critical because forcing trades can become very costly. For example, [...]
Two Market Scenarios From Here
I discussed the following in a Market Video over the weekend. Here is a summary of the important points: 1) In my 18 years of trading, there have been 4 years where the market grinded higher for almost the entire year: 1999, 2003, 2009 and 2013. It's important to look at what happened the FOLLOWING year not only to understand market history, but also to try to ANTICIPATE what could happen this year. In all [...]
Caution Warranted
Last weekend, I wrote a post about the lack of "New Ideas" in this market. On Tuesday night, I posted a video saying I was "short-term cautious." I know it hasn't paid to say ANYTHING bearish over the past 18 months because EVERY DIP has been bought, but this pullback feels different. I'm noticing that every rally is being sold into and there are STILL VERY FEW safe entries in quality stocks. In addition, today [...]
A Few Thoughts About The Recent Price Action
1) On Monday afternoon, I heard the financial media say there was too much risk in holding stocks overnight. If you listened to them, then you probably got scared and sold some of your stocks. 2) If you watched or listened to the price action, you would have seen that volume was light and many leading stocks were barely down or even green on Monday. 3) To summarize my first two points, if you have [...]
People Still Hate The Stock Market
Back in July 2013, I wrote a blog post titled The Main Reason The Stock Market Keeps Going Higher. Back then, I stated the main reason driving the market higher is "A Complete Change in Investor Psychology." Basically, the majority of people HATE the stock market...and that still hasn't changed. 1) Of course Quantitative Easing has something to do with the market's success, but ever since the Federal Reserve announced the unwinding of their QE [...]
Don’t Short Addictions
When humans stress, we all have the need to reach for something. For some it's food, a cigarette, alcohol, coffee, drugs, gambling or anything else that might put us in a different state of mind so we don't have to deal with our problems. This isn't an article about psychology because I am not a shrink. I simply want to make the point that the stocks of many of these companies have performed very well [...]