In this economic environment, it is difficult to know which end is up. The mainstream economists are virtually hailing the recovery and the advent of a new growth economy. In other words, we are heading back towards normal. Hardly, in my view. The trouble with most economists is that they all come from the same dithering school of nonsense. Their models are static and conventional and non-elastic. They view the present in terms of the past by using data that is averaged and non-adaptable...A+B=C, so that when they see A they automatically predict B and then assume C.
I think things ARE different this time, finally. Over the last 50-60 years, we have had several booms and busts but we have always recovered from the busts. However, the new variable is that debt has now become a major factor in the emergence of any recovery. All levels of debt have been skyrocketing over the last few decades. And increasing debt has the propensity to demand higher levels of income to service it. With the interest payments demanding more income, there is less available to use for saving, investing and spending.
You eventually get to the point where income does not cover the debt payments. The answer is not to borrow more, but to pay down more debt. Our economy, in the years ahead will be burdened by higher payments to service debt, higher taxes, and more regulations making it difficult to increase levels of business creation. And you tell me MR economist that we are heading toward a new sustainable growth economy? Hmmmm.
Anyway, the last OIH trade was sold for a $2.70 gain. Since then, the OIH has trended toward the downside. The newest trade has been to buy the DEC 70 put option on MOS (Mosaic). This trade has been a wild ride. The average cost is now $11.70, and the option over the last week ranged between $7.70 and $12.90. True, I possibly should have closed this trade for a loss, however, several of the indicators I watch were signaling a downside correction. At this point, I am at break even and expecting further downside which will increase the value of my position. Perhaps, my evaluation is faulty and I will sell for a loss which must be considered.
The bottom line is that short term trading is the way to go in this market. And to be successful requires using deep-in-the-money options if you are not trading stock. At least you can take advantage of any quick bursts in either direction as prices have been eager to stop and reverse in both directions. The upside momentum is waning as volume has been noticeably light for a rally of all mothers, so to say. And he silly bulls are always telling us that volume matters.
I think the next major direction will be to the downside because with an improving economy, MR Barnacle Ben will have to raise interest rates, thus making the service of outstanding debt even more costly. And if we fail to get a substantial recovery, the market will sink like a stone.
This is because high expectations are currently baked into the markets, and I think the political landscape will eventually preclude the formation of any robust recovery.
This means, do not blindly go into the markets expecting bullish action. Forces may squelch any significant upside from here. This country has gotten itself into a pickle of cucumberous (sic) proportions. This is the result of reckless unabated spending and money creation. Somewhere down the line, reality will catch up to the current dream world the government is stranded in.
Sunday, December 6, 2009
Saturday, November 21, 2009
This Is A Great Trading Market
In my last post, the OIH trade was stopped out for a slight gain. During the last week, I have traded puts on US steel, X, bought at $7.50 and sold for $9.65. And also calls on Mastercard, MA, bought for $9.90 and sold an hour later for $15.10. This was truly a fortunate trade.
I have now bought a call on the OIH, trading near $117, the DEC 105 Call, for $13.00. I think oil is forming a bull flag and as long as it holds $76, it has the possibility of breaking through resistance and moving to above $88. But with the dollar finding a footing in the market, it could rebound enough to send oil back toward $68-70.
By targeting short term gains of $2-4 per trade, it is possible to earn 10 points or more in a month. The goal is to earn approximately $1,000 per contract. Trade 10 contracts, and you have a real plan to earn over $100,000 a year.
This is not the time to be expecting the market to continue to move up to infinity. Quick, targeted and nimble trading is perfect in this environment. The economy is too flimsy to expect great GDP expansion going forward. The Wall Street crowd is pricing in 4-6% next year and that simply will not happen, other than perhaps for one quarter.
This country is very fragile economically right now, and yet we have the current socialist government doing everything opposite of what is needs to do. YES, Virginia, it is part of the master leftist devised plan to destroy America, its freedoms, liberty, capital and free markets.
Today will be a sad day if health care passes because it will start the government on its path to reshaping America into 1950-60 Russia. More on this later....
I have now bought a call on the OIH, trading near $117, the DEC 105 Call, for $13.00. I think oil is forming a bull flag and as long as it holds $76, it has the possibility of breaking through resistance and moving to above $88. But with the dollar finding a footing in the market, it could rebound enough to send oil back toward $68-70.
By targeting short term gains of $2-4 per trade, it is possible to earn 10 points or more in a month. The goal is to earn approximately $1,000 per contract. Trade 10 contracts, and you have a real plan to earn over $100,000 a year.
This is not the time to be expecting the market to continue to move up to infinity. Quick, targeted and nimble trading is perfect in this environment. The economy is too flimsy to expect great GDP expansion going forward. The Wall Street crowd is pricing in 4-6% next year and that simply will not happen, other than perhaps for one quarter.
This country is very fragile economically right now, and yet we have the current socialist government doing everything opposite of what is needs to do. YES, Virginia, it is part of the master leftist devised plan to destroy America, its freedoms, liberty, capital and free markets.
Today will be a sad day if health care passes because it will start the government on its path to reshaping America into 1950-60 Russia. More on this later....
Monday, November 9, 2009
Market May Rally Into 2010
The markets are surging today and nearing taking out the previous highs of a few weeks ago. Specifically, I am long the OIH with the DEC09 110 call option purchased on 11/9 for $12.25. Based on the real possibility of oil trading above $90 a barrel relatively soon, this position should move smartly higher. The next hurdle is taking out the previous high of $132. Then the next target is $142, which is the 50% re-tracement level between the high of 222 and the low of 61. If oil can surpass $90, then a move to this level is warranted.
Buy a deep-in-the-money DEC or JAN call options on the OIH on any pullback below $123. Still, time will tell, but I believe this is a false rally and that in early 2010 we will have a significant sell-off to reflect reality of a recovery going bad.
Buy a deep-in-the-money DEC or JAN call options on the OIH on any pullback below $123. Still, time will tell, but I believe this is a false rally and that in early 2010 we will have a significant sell-off to reflect reality of a recovery going bad.
Saturday, September 26, 2009
False Recovery = False Markets 10/30/09
The S&P 500 tested 1100 a few weeks ago. The low this year was about 667, which means it has advanced about 64%. If you caught a good chunk of that move, it means you have earned, on paper anyway, about 3 to 4 years worth of average returns in about 7 months. Is it time to think about selling or at least scaling out of your positions? YES!!
I know, there are too many of you who are glued to the media speak about the new recovery and subsequent bull market to even think about jumping ship just as the "move" is gaining strength. It is only natural for most investors/traders to be virtually permanently bullish, but the new normal economy is anything like the old.
Witness the current industrial capacity usage of under 70%; which means there will be little expansion any time soon. Also note that the current socialist administration is intent upon destroying jobs by creating new taxes on small businesses, the very engine of consistent job growth in the past. Will green jobs take up the slack? Not unless you can get a job mowing Al Gore's estate or cleaning his multi-thousand square foot energy guzzling mansion.
Consider that we will need to create about 15 million new jobs in the next 5 years just to get back to 5-6% unemployment which means about 250,000 new jobs must be created every month, on average. It ain't gonna happen. At least not with this dummy administration that would likely have a hard time making profits peeling potatoes for McDonalds.
Other factors include rising energy prices, less credit, fewer consumers using credit, no mortgage equity loans, less overall demand for end products, big questions on the future of taxes and government interventions, global demand sluggish at best, massive government debts which will suck up credit to pay interest upon, an overheated market, baby boomers needing to save more and spend less over the next decade, and the list goes on....
I am short BIDU at $397, with the DEC 350 put (BPJXJ) at 8.70. I know this is a stock that the bulls love to love because it is going to $1,000....but with the recent downdraft from about $440 to $353, it has retraced 50% back to $400. I believe it will fall back to at least retest the $375 area. This will be a short term trade. Too many bulls make for juicy profits trading counter-trend, as most people in this stock have no clue about why they are. They are just following everyone else...which is a prescription for disaster.
Witness today's market action verses yesterday's false rally based on the government jacked-up GDP numbers. There is little sustained growth in the economy as more government stimulus will end up causing ever greater reductions in growth. A government dollar put into the capitalist free economy is really costing about $1.30 (including interest) and resulting in about a 40-50 cent return into the economy. The government has never and never will create lasting economic benefits since its purpose is to tax to the max and redistribute an ever-shrinking pie of over-stated wealth.
We still could test the March 2009 lows and go lower still...say to about 550-575 on the S&P 500; that is of course if we do not sink into a protracted depression based on and over-indebted economy (consumer, business and government). Sorry, but the current green-shoot nonsense is just that. We are still very much in a pickle of monstrous dillarity.
The way out into the new prosperity will be a long road of mish-and-mash or perhaps a super-quick avalanche which clears the decks. However we go, there will be prolonged pain and remorse in the financial system despite all the crackhead talk from Obama and his cast of a thousand czars. Debt built up over 5 or 6 decades must be reconciled and refined. Blessed are the cash rich citizens, even though the value of that cash sinks every day.
As an add on, the BIDU Dec 350 put was sold today at 14.00. After commissions, this resulted in a $504 profit. My first sell target was the $375 area, and indeed BIDU traded just below $377. It was difficult to pass up this type of hurried gain knowing that this stock can easily move 10-20 points in a day.
Thus far, just after 2PM, the markets have surrendered all of Thursday's fake gains. We may get a fairly strong swosh to the down side by the close, or perhaps a solid down-blast on Monday morning that may set up a nice counter-trend upside trade. I think we could get down to at least 950 on the S&P in a week or two or three.
OIH looks good to buy for call options if it gets down between $111-113, for a relatively quick reversal up into the $115-117 area. And there will be other options to be bought in both directions, keeping a weathered eye on price movement and a decisive trigger finger on the buy/sell button. Quick hits will work well in an undetermined market in which the bulls have been gored and the bears are looking to put a contract out on the upside momentum.
I know, there are too many of you who are glued to the media speak about the new recovery and subsequent bull market to even think about jumping ship just as the "move" is gaining strength. It is only natural for most investors/traders to be virtually permanently bullish, but the new normal economy is anything like the old.
Witness the current industrial capacity usage of under 70%; which means there will be little expansion any time soon. Also note that the current socialist administration is intent upon destroying jobs by creating new taxes on small businesses, the very engine of consistent job growth in the past. Will green jobs take up the slack? Not unless you can get a job mowing Al Gore's estate or cleaning his multi-thousand square foot energy guzzling mansion.
Consider that we will need to create about 15 million new jobs in the next 5 years just to get back to 5-6% unemployment which means about 250,000 new jobs must be created every month, on average. It ain't gonna happen. At least not with this dummy administration that would likely have a hard time making profits peeling potatoes for McDonalds.
Other factors include rising energy prices, less credit, fewer consumers using credit, no mortgage equity loans, less overall demand for end products, big questions on the future of taxes and government interventions, global demand sluggish at best, massive government debts which will suck up credit to pay interest upon, an overheated market, baby boomers needing to save more and spend less over the next decade, and the list goes on....
I am short BIDU at $397, with the DEC 350 put (BPJXJ) at 8.70. I know this is a stock that the bulls love to love because it is going to $1,000....but with the recent downdraft from about $440 to $353, it has retraced 50% back to $400. I believe it will fall back to at least retest the $375 area. This will be a short term trade. Too many bulls make for juicy profits trading counter-trend, as most people in this stock have no clue about why they are. They are just following everyone else...which is a prescription for disaster.
Witness today's market action verses yesterday's false rally based on the government jacked-up GDP numbers. There is little sustained growth in the economy as more government stimulus will end up causing ever greater reductions in growth. A government dollar put into the capitalist free economy is really costing about $1.30 (including interest) and resulting in about a 40-50 cent return into the economy. The government has never and never will create lasting economic benefits since its purpose is to tax to the max and redistribute an ever-shrinking pie of over-stated wealth.
We still could test the March 2009 lows and go lower still...say to about 550-575 on the S&P 500; that is of course if we do not sink into a protracted depression based on and over-indebted economy (consumer, business and government). Sorry, but the current green-shoot nonsense is just that. We are still very much in a pickle of monstrous dillarity.
The way out into the new prosperity will be a long road of mish-and-mash or perhaps a super-quick avalanche which clears the decks. However we go, there will be prolonged pain and remorse in the financial system despite all the crackhead talk from Obama and his cast of a thousand czars. Debt built up over 5 or 6 decades must be reconciled and refined. Blessed are the cash rich citizens, even though the value of that cash sinks every day.
As an add on, the BIDU Dec 350 put was sold today at 14.00. After commissions, this resulted in a $504 profit. My first sell target was the $375 area, and indeed BIDU traded just below $377. It was difficult to pass up this type of hurried gain knowing that this stock can easily move 10-20 points in a day.
Thus far, just after 2PM, the markets have surrendered all of Thursday's fake gains. We may get a fairly strong swosh to the down side by the close, or perhaps a solid down-blast on Monday morning that may set up a nice counter-trend upside trade. I think we could get down to at least 950 on the S&P in a week or two or three.
OIH looks good to buy for call options if it gets down between $111-113, for a relatively quick reversal up into the $115-117 area. And there will be other options to be bought in both directions, keeping a weathered eye on price movement and a decisive trigger finger on the buy/sell button. Quick hits will work well in an undetermined market in which the bulls have been gored and the bears are looking to put a contract out on the upside momentum.
Tuesday, August 11, 2009
Is This Rally For Real?
OK, the markets have rallied over 50% from the March lows. As usual, the market is somewhat ahead of the economy. For me to believe that we can go higher based on an economic turnaround that has either begun or will begin shortly, I want to see this happening:
The true jobless rate is likely between 13-15%. How will the economy grow in the future with housing still in the muck, businesses not expanding, taxes rising, energy costs ratcheting higher and health care sucking more earnings from households? And if the government gets hold of the health care system, expect to pay through the nose to support potential Obama voters in the form of immigrants that will get FREE care, anytime, anywhere. In other words, where do we see jobs being created that will lift the economy and cause people to spend more, even though they will have fewer dollars to spend?
It would be sweet to think that the downturn will or has reversed course and that all will be well next year. This time, I believe things are different. China is still struggling to make an economic revival. Europe is still falling and has not found bottom. Russia is reeling with energy issues and banking problems, more severe than most of ours. So, dear friend, the world economy will not be so accommodating as to bail the US out anytime soon.
There are too many factors working against a economic revival, sad to say, and perhaps this will lead to a doomed recovery that will materialize as a rather bumpy and inconsistent morass. The consumers of America have it right; get out of debt or pay it down, save more income and cut extra-ordinary and non critical spending. Unlike the government, the consumer is doing it right, even though It is the consumer who mainly propels the economic engine. Government on the other hand is pumping up the deficits and spending like there is no tomorrow. Somewhere, something has got to give.
As far as trading goes, I think we could be heading for a severe correction, as yet unforeseen by the mainstream pundits that will last for several months. Mid August to the end of November, to be specific. I think the news will not be to the liking of the markets, and as we drill down to what is really happening, the economy still stinks, like an unwashed commie liberal socialist Obama lover. Any way, this rally will lose steam as the news becomes less favorable to a recovery until well into next year, if at all. Take it a day at a time and enjoy your world.
The true jobless rate is likely between 13-15%. How will the economy grow in the future with housing still in the muck, businesses not expanding, taxes rising, energy costs ratcheting higher and health care sucking more earnings from households? And if the government gets hold of the health care system, expect to pay through the nose to support potential Obama voters in the form of immigrants that will get FREE care, anytime, anywhere. In other words, where do we see jobs being created that will lift the economy and cause people to spend more, even though they will have fewer dollars to spend?
It would be sweet to think that the downturn will or has reversed course and that all will be well next year. This time, I believe things are different. China is still struggling to make an economic revival. Europe is still falling and has not found bottom. Russia is reeling with energy issues and banking problems, more severe than most of ours. So, dear friend, the world economy will not be so accommodating as to bail the US out anytime soon.
There are too many factors working against a economic revival, sad to say, and perhaps this will lead to a doomed recovery that will materialize as a rather bumpy and inconsistent morass. The consumers of America have it right; get out of debt or pay it down, save more income and cut extra-ordinary and non critical spending. Unlike the government, the consumer is doing it right, even though It is the consumer who mainly propels the economic engine. Government on the other hand is pumping up the deficits and spending like there is no tomorrow. Somewhere, something has got to give.
As far as trading goes, I think we could be heading for a severe correction, as yet unforeseen by the mainstream pundits that will last for several months. Mid August to the end of November, to be specific. I think the news will not be to the liking of the markets, and as we drill down to what is really happening, the economy still stinks, like an unwashed commie liberal socialist Obama lover. Any way, this rally will lose steam as the news becomes less favorable to a recovery until well into next year, if at all. Take it a day at a time and enjoy your world.
Saturday, May 23, 2009
Make It Or Break It
We are at the go higher or trend lower point in the market. After a 35-40% move from the bottom, perhaps this bear market spike has run out of steam. There is little question that many stocks are well ahead of their next 6 month fundamentals. And since we have basically relied on the consumer to drive the economy and therefore the markets, many new roadblocks to returning to the good old days are about to make there presence felt.
Witness the new economy and the new consumer situation moving from 2009 into 2010 and beyond. These themes are going to hamper positive growth in the economy and thus stall the markets for quite a while.
Credit is not so prevalent.
Consumers are using less credit.
Consumers are geared toward saving and paying down debts.
The US is heading into deep debt and thus higher interest rates.
Which will it be, more deflation or strong inflation?
Jobs are scarce and layoffs are still occurring.
Investors are still stung with massive losses.
The Dems are bent on raising every tax known to man.
Cap and trade will put enormous pressure on consumer utility bills.
The world economy is still falling as far as output goes.
Real Estate will not suddenly become more valuable.
Massive amounts of new capital will be needed to shore up banks and financials.
The stress test was equivalent to taking a pulse while sleeping.
States will need massive tax hikes to even stay afloat.
Many are declaring bankruptcy which will mean fewer new credit accounts created.
Many buildings will go empty as business closes and consolidates.
New construction with so much unused space now?
And the list goes on and on.....
Buy deep in the money put options on RIMM, OIH, BG, CME, AGU, AMZN, APA and MA. Use stops and be quick to exit if some of these head back toward their recent highs. We could see a move back down to S&P 500 in the 750-800 area over the next few months. The markets look rather exhausted for now as all the hoopla about a sudden reversal in the economy dies down.
Look at oil. Where is the demand? Go short above $60 and look for move back toward $50 and maybe to the $45 area. The fundamentals do not support current prices. Recall the quick drop from $147 last year. Oil will creep up to $75-85, but not for a while or until demand levels out.
The true bull will not be charging this year. Perhaps sometime early next year. Most pundits think this is a normal economic pullback. They can't wait for the markets to come roaring back. That is because they know not how to make profits when markets fall, thus they are only half traders/investors who struggle to make their silly 5-10% yearly returns. It is up to you to make your own way in the markets and create your own trading program based on your beliefs. And, truth be known, you are an unlimited being. It is only society and governments and schools and religions that tell you that you cannot do this or that. Most of what you have been told and learned is BALDERDASH and HORSE-S..T.
Witness the new economy and the new consumer situation moving from 2009 into 2010 and beyond. These themes are going to hamper positive growth in the economy and thus stall the markets for quite a while.
Credit is not so prevalent.
Consumers are using less credit.
Consumers are geared toward saving and paying down debts.
The US is heading into deep debt and thus higher interest rates.
Which will it be, more deflation or strong inflation?
Jobs are scarce and layoffs are still occurring.
Investors are still stung with massive losses.
The Dems are bent on raising every tax known to man.
Cap and trade will put enormous pressure on consumer utility bills.
The world economy is still falling as far as output goes.
Real Estate will not suddenly become more valuable.
Massive amounts of new capital will be needed to shore up banks and financials.
The stress test was equivalent to taking a pulse while sleeping.
States will need massive tax hikes to even stay afloat.
Many are declaring bankruptcy which will mean fewer new credit accounts created.
Many buildings will go empty as business closes and consolidates.
New construction with so much unused space now?
And the list goes on and on.....
Buy deep in the money put options on RIMM, OIH, BG, CME, AGU, AMZN, APA and MA. Use stops and be quick to exit if some of these head back toward their recent highs. We could see a move back down to S&P 500 in the 750-800 area over the next few months. The markets look rather exhausted for now as all the hoopla about a sudden reversal in the economy dies down.
Look at oil. Where is the demand? Go short above $60 and look for move back toward $50 and maybe to the $45 area. The fundamentals do not support current prices. Recall the quick drop from $147 last year. Oil will creep up to $75-85, but not for a while or until demand levels out.
The true bull will not be charging this year. Perhaps sometime early next year. Most pundits think this is a normal economic pullback. They can't wait for the markets to come roaring back. That is because they know not how to make profits when markets fall, thus they are only half traders/investors who struggle to make their silly 5-10% yearly returns. It is up to you to make your own way in the markets and create your own trading program based on your beliefs. And, truth be known, you are an unlimited being. It is only society and governments and schools and religions that tell you that you cannot do this or that. Most of what you have been told and learned is BALDERDASH and HORSE-S..T.
Friday, April 10, 2009
Full Steam Ahead Or?
The markets have been rallying rather strongly and fairly consistently. Nothing like the usual bullish-pop that often comes during a bear market. I would expect this rally to hit a wall after about a 35-40% move. So, there is still a ways to move up here. However, the BIG question being bandied about is whether of not we have seen the last of the big bad bear market. I have my suspicions. You can see the bullish tone wanting to explode to the upside as traders and investors are licking their chops at the market moving to new highs in the next several months. Really, the greedy are already spending those huge profits that will be coming over the next year or so.
Yes, it is tempting to say that the bull is back. A look at history tells us that this just may be the first of several bear market rallies that sucker the heck out of the always-bullish bulls. My bets are not so certain. I think there is still a lot of unknowns in the market as companies have less visibility toward earnings in the coming quarters. And, as we have seen over the last year and a half, there seems to always be another shoe to drop or some bad news lurking around the corner just when some company says the decks are clear.
I estimate that the GOV will be all but forced to ante up another $2 to 5 trillion to right the ship; i.e. keep it afloat. And that figure could be much higher over the next 2 or 3 years. And God only knows how much Obama will raise taxes to pay for all this government help. If the gov had been doing its job in the first place, much of this over usage of credit and the derivative catastrophe could have been avoided or at least tempered. Oh well, the best thing to do is to go your own way. Make your plans and plow ahead regardless of what the economy or the politicians say or do. They know nothing; or at least they know nothing that will make any difference to me and my wealth creation.
Areas to look at for trading include deep-in-the-money options on energy related stocks as well as some tech and maybe a few retail. Things like RIG, APA, UPL, AZO, RIMM, APPLE, and AMZN. Do not chase any of these. Wait for them to come to you in price. That is wait for a pullback to enter a trade. There are any number of stocks that can be traded in both directions. You don't have to be perfect in buying, but you do have to know when you are going to sell. And that goes for those stocks you have held for a decade or two. Why buy a stock, hold it for years and watch it go up and down? How can a sweet dividend save you when you stock has lost 20-60% in underlying value?
One thing that I think could happen is that we form a reverse head-and-shoulders pattern in the S&P 500. All we need is a correction back down to the November 2008 lows after we complete the current up-move. That would form the right hand shoulder and possibly confirm a bottom in this bear cycle. But who knows? This is still a time to be nimble as well as place a few longer term bets of selected stocks that will not fold. You can bet that companies like CAT, DE, CMI, AGU, POT, BTU, X and CLF will all eventually be much higher than today. The question is how soon? By the end of this year or the end of the 2010's (2020) or somewhere in between.
Any way, go your own way and make things work for yourself. The universe gives you all that you need and as you know, you are a creation of that universe. You have the power to create tremendous amounts of wealth if you so desire. Whatever you do, have fun and always look on the lighter side of things because after all it is only life.
Yes, it is tempting to say that the bull is back. A look at history tells us that this just may be the first of several bear market rallies that sucker the heck out of the always-bullish bulls. My bets are not so certain. I think there is still a lot of unknowns in the market as companies have less visibility toward earnings in the coming quarters. And, as we have seen over the last year and a half, there seems to always be another shoe to drop or some bad news lurking around the corner just when some company says the decks are clear.
I estimate that the GOV will be all but forced to ante up another $2 to 5 trillion to right the ship; i.e. keep it afloat. And that figure could be much higher over the next 2 or 3 years. And God only knows how much Obama will raise taxes to pay for all this government help. If the gov had been doing its job in the first place, much of this over usage of credit and the derivative catastrophe could have been avoided or at least tempered. Oh well, the best thing to do is to go your own way. Make your plans and plow ahead regardless of what the economy or the politicians say or do. They know nothing; or at least they know nothing that will make any difference to me and my wealth creation.
Areas to look at for trading include deep-in-the-money options on energy related stocks as well as some tech and maybe a few retail. Things like RIG, APA, UPL, AZO, RIMM, APPLE, and AMZN. Do not chase any of these. Wait for them to come to you in price. That is wait for a pullback to enter a trade. There are any number of stocks that can be traded in both directions. You don't have to be perfect in buying, but you do have to know when you are going to sell. And that goes for those stocks you have held for a decade or two. Why buy a stock, hold it for years and watch it go up and down? How can a sweet dividend save you when you stock has lost 20-60% in underlying value?
One thing that I think could happen is that we form a reverse head-and-shoulders pattern in the S&P 500. All we need is a correction back down to the November 2008 lows after we complete the current up-move. That would form the right hand shoulder and possibly confirm a bottom in this bear cycle. But who knows? This is still a time to be nimble as well as place a few longer term bets of selected stocks that will not fold. You can bet that companies like CAT, DE, CMI, AGU, POT, BTU, X and CLF will all eventually be much higher than today. The question is how soon? By the end of this year or the end of the 2010's (2020) or somewhere in between.
Any way, go your own way and make things work for yourself. The universe gives you all that you need and as you know, you are a creation of that universe. You have the power to create tremendous amounts of wealth if you so desire. Whatever you do, have fun and always look on the lighter side of things because after all it is only life.
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