Doing nothing has been a good strategy since April and it continues to be my core strategy. Besides having been a good strategy, I take pride in not participating in a market this corrupt.
I’m still holding my long positions in SO and CHL. I recently added a long position in BMY. My investing thesis [...]
This morning news is out that mortgage refinances are up thanks to the Fed dropping interest rates even lower. This is supposed to stimulate the economy by reducing mortgage payments giving people more disposable cash to spend in the economy. The problem with this philosophy is that the lower rates only have a net benefit [...]
I predict that a future generation (as many in this generation already do) will look back at the Fed’s purchase of treasuries at auction and shake their heads in disgust. They will look back and think how dumb and corrupt our government was (hopefully it will be past tense and cleaned up by then). Can [...]
Many traders use a stop to manage risk. It sounds easy enough. Limit losses at the start of the trade by determining your stop out before you enter the trade. Let winners run. Yet, anyone that has traded even for a short while knows that the methods taught in technical analysis books for managing stops [...]
In my prior post I wrote that correlation might be breaking down and that there may be a chance to actually pick some stocks. Since that post, the market picture has improved technically. The major US averages have moved over the 200 DMA and my prime indicator – FXI – has also moved over the [...]
Yesterday I added a position in CHL. It is one of the stocks I mentioned a few weeks back. I would classify this market as moderately weak and non-trending. We’ve been going up over the past few weeks, but the longer term charts are still bearish (albeit perhaps turning).
Traders have grown accustomed to strongly trending [...]
Almost all financial pundits have an opinion. Typically, most pundits either through TV, newsletter or blog have some call to action. Buy this, sell that. There is always confidence and conviction (albeit artificial) behind every call to action.
You don’t often hear “relax and leave your money in cash until the market recovers technically.” Sure, [...]
This is not a political blog and therefore I will keep this post narrow in scope. Today the Justice Department filed a lawsuit challenging the Arizona immigration law. I’ll sidestep even discussing whether the law “invalidly preempts federal law.” I also don’t want to get into how illegal immigrants should be treated. I also don’t [...]
Warning, we are in a bear market.
Using the 200 day moving average as a line of demarcation between a bull and bear, we can safely label this market as a bear. Further, many of the major averages are about to confirm the 200 DMA break by breaching the 300 DMA. IWM, QQQQ, and DIA all [...]
For those that left the market with me in April, not trading for two months seems like a pretty great deal right now. One thing I’ve tried to communicate in prior posts is that it is fine to stop trading for a month, three months or even a year.
Of course, there is tremendous bias [...]