Skip to main content

Status Quo!

This guy has been spot on ever since I started following him in 2007. He is someone you should really listen too.

 
 

Sent to you by Dominic via Google Reader:

 
 

via T3Live Blog by Scott Redler on 4/2/10

By: Scott Redler

Today's job report landed smack in the middle: not too hot for all the analysts who say that the fed will raise rates sooner rather than later, but regardless this was the best report we've had in years. That should certainly keep the Bulls happy. We finally got some nice gains in the private sector and that makes the recovery look for sustainable. That being said, I think it's back to the same old market, except the emphasis on this next move forward into May will be even more stock and sector specific than it's been so far this year. Traders have been rewarded for following the rotation!

The move since the February 5th reversal day all started in the Russell 2000, followed by the Nasdaq. The S&P came next and lastly the Dow joined the party at new highs. This is how a Bull market rally should work: the growth companies and technology take the lead with value following the trend higher. Unfortunately this last leg up will probably be lead by the commodities and should lead to another 9% broader market correction (or more) as oil gets closer to the mid 90's. This will occur at around the point when the Dow gets above 11,000 and stalls in the 11,000-11,400 area.

Technically as long as the Dow holds 10,800 and the S&P holds 1,160-1,164, we should see this market make one more stretch through highs. These are key support in order for the current uptrend to remain in tact. After this last push, I will be on the lookout for a nice, tradeable correction that should start some time late in April or mid-May. As we go through earnings, we will see the "Haves" and the "Have Nots." But we will cross that bridge when we get there. Scenarios like Research in Motion (RIMM) will happan and disappointed investors will throw the company into the penalty box for another correction/consolidation period.

Right now we all need to stick with what's working: one to three day actionable strategies. Stay flexible! There are still plenty of problems facing America and there will be a time and place when the market will pay attention. But, wait for the action to tell us when the markets notice.

Have a great weekend!

 
 

Things you can do from here:

 
 

Comments

Post a Comment

Popular posts from this blog

WOW! I think that sums it up

Many of you have been reading this blog may have noticed that my blogging frequency has increased over the past few weeks as I got short the market. As you can imagine I am down money since getting short the market, this is the time when most people pull away from posting. But my goal is to stay active and involved and show you that trading is not always rainbows and butterflies. It is times like these that the things I have been sharing over the past couple of weeks are so important. You need to trade small relative to your account. I have a decent short position in the market and my portfolios are set up to make some awesome returns if we finally turn lower. But something I would like to point out is that my account is 70% Cash.  I learned a long time ago how important it is to live by the rules you preach. Because of my discipline I am able to continue to hold my positions, I have time and capital on my side. I can't stress enough how important it is not to get to big....
Post a Comment
Read more

Stay Small, Stay Out of Trouble

To expand on my post from yesterday about patience. I want to talk about a very important element that allows patience in a position, and that is staying small. If you trade too big RELATIVE to your personal account size, you are likely to be forced to exit the trade before the trade works in your favor. Many trades myself included have all experienced the pains of trading a position way too large given our account size. There is this predisposition out there that the only way you are going to make money in the financial markets is if you are trading 10 lots of options and 1000 shares of stock at the time. This is not the case, and if this is your mentality you will likely ensure yourself trouble. We have all read the stories of traders blowing up their account. I personally think a good rule of thumb is to not risk more than 5% of your account value on any one position. Good Luck Trading! In The Money Trades And 1 favor that we ask:  If you like the hard work w...
Post a Comment
Read more
more good news from FXStreet : Tom Fitzpatrick, senior technical analyst at Citibank in New York. Monday, July 15, 2002 "Parity is a psychological, not a technical level...and whether we pause around parity or not, we are likely to see significant further dollar losses...Our initial target is $1.03 to $1.0450. If that level is taken out, it actually casts a question mark against the whole of the dollar's rally of the last seven years, and could open up a full-blown bear market for the dollar." Julian Jessop, chief European economist at Standard Chartered Bank. Monday, July 15, 2002 "The dollar is under pressure from everything from economic problems to asset reallocation away from the U.S. and corporate accounting problems. It's difficult to see any positive factor for the dollar at the moment. The root of the problem is the U.S. current account deficit. If the U.S. doesn't have to attract an enormous amount of foreign capital, people wouldn't have to wor...
Post a Comment
Read more