Lot of investors were stunned @ the freefall in the markets........
Markets are normally prime for corrections @ any stage......
Corrections are generally of 3% to 7% from any recent peak.....
Markets are NEVER all clear...EVER !!!!!
Most investors/traders have this "illusion that they CAN beat the market"
Smart trader KNOW "not to fight the tape"......
Tape is always giving "signal about the NEW strong sectors"
So.....as an investors/traders.....you are left with few choices......
One.....understand the current environment.......and DO the homework accordingly.....
In that homework...one has to understand that NO organization will save you from the CARNAGE......whether it is IBD,Dan Zanger,IH,Fools,CNBC & our life savers all trusted all KNOWING message Boards/BLOGS........
So in the END it is your OWN comfort level & CONVICTION which matters.......
Too many people are looking for "instant analysis without doing their OWN homework"
If you ARE afraid of the current tape......it is NOT going to go away anytime SOON......
I still think...April will give US the FIRST indication of how deep US slowdown IS......and how deep the writeoffs ARE.......
So....How FAR this rally from bottom will go.......?????
You think anyone KNOWS ????
I do NOT believe so.......
Let me quote some PUNDITS first :
Art Cashin of UBS said..."this rally has gone lot Farther than what he thought"
Jimmy the Cramer said...."we have hit the bottom"
Fast Money crowd....is GIDDY now..& giving the impression that "everything IS a BUY"
IBD says 100% cash.....
So where do I stand in the middle of "newborn EUPHORIA"......
CAUTIOUS is the word.......
I am positioning to TRADE OUT of many positions in the coming days......
So it WILL be quick IN & OUT for me......with less exposure AGAIN......
WHY ????........
I feel we are having a healthy RUNUP and we MAY stall @ some point ........
I feel THEN...it is going to give US a pullback of 3% to 6%........!!!!!
I am NOT implying that all sectors will pull back...but some overbought WILL......
So...by reducing EXPOSURE......I am hoping to benefit from ongoing or renewed strength in beaten down stocks......
I am anticipating an ongoing ROTATION on a DAILY basis ...which will be driven by NEWS !!!
Lot of stocks have been trashed....so a longer term view is PRUDENT......
In plain english ...I will be keeping majority of my positions...but WILL lock profit in some & thus reduce exposure.......
As usual I will be posting all my trades.
If you have a long term view ...this is a very good time to keep accumulating for 2009 GAINS !!!
KNOW the difference between "overbought & oversold".....that is the KEYWORD for both stocks & markets !!!
BLOG does NOT give buy or sell.
Enjoy your sunday!!!
Saleem
14 comments:
Hi Saleem. I agree with caution. At the very least, volitility will continue. When most people buy, they think of how high it can go. When I buy, I also think of how low it can go and place mental stops to limit my losses. Chinese internet stocks will get a test monday with SOHU earnings. I am still sitting on mostly cash. I have BIDU (bounced off 200dma). It has gotten clobbered despite analysts increasing earnings estimates (smells like ISRG). I also have LDK. Rest is cash waiting for other gems if the market confirms a rally. Peace.
Hi Minaccess,
Any breakup in market technicals NEEDS base building.....which involves TIME.....
August will be an opportune time to be aggressive...till then "take the money & RUN approach should WORK"
SOHU has already pre-announced their ER range...which was higher than consensus then.....I expect them to come @ higher end of their given "new guidance"...
LDK will do extremely well going into 2009.....thus my long term bet.
BIDU multiple MAY be an issue going forward...in this LOW PE environment....just my 2 cents...
Good luck with your strategy.
Saleem
HELLO Minaccess
I would not mess with BIDU with the market still roiled like it is.
I do not think that techncial stocks are in favor now. Look to AAPL to provide you a nice return.
just MHO
Good Luck
Madmax
Hello Saleem and Madmax. Thanks for the advice on BIDU. I have a $4+ gain on BIDU. I will NOT let it end in a loss unless there is a gap at the open. Futures are up in US and China at this point. Thanks.
GOOD MORNING SALEEM:
I hope you have a great trading day!!!!!!!!!!!!!!!
Looking at MA it is strong again.
NYX amd AAPL are strong also.
The oil tankers are showing strength here: FRO , VLCCF, TK, TNP
AN opinion on when AGU may break out?
Madmax
GOOD MORNING SALEEM:
I hope you have a great trading day!!!!!!!!!!!!!!!
Looking at MA it is strong again.
NYX amd AAPL are strong also.
The oil tankers are showing strength here: FRO , VLCCF, TK, TNP
AN opinion on when AGU may break out?
Madmax
Hi Saleem. Hidden strength today in a down market. Dow now down 60, but 8/10 stocks on my watch list are green.
MINACCESS
Hello looks like BIDU has shown it's course and it is up! Good Show!!!!
Look at tankers for Divi and diversification. For shippers you have ois drys and LNG your pick!
Again AAPL is showing it teeth.
Have a great day
Madmax
Hi Madmax,
Keep an eye on oversold stocks to make money.....
AGU is oversold...so it IS breaking out....it is ABOVE 50 DMA......
Always pay attention to technicals...
Always FIRST 70% FA...then 30% technicals ...WORKS like a charm...
Saleem
Hi Minnaccess,
Yes.....8 out of 10 green is a great BUY signal...
See when certain sectors are oversold...they REVERSE even markets are down.....
So keyword IS oversold stocks with great FA....
Saleem
SALEEN
I know htat you seen this Just thought that others might like to see it.
Regards to you my friend. Madmax
Upside ReCalc™ : Adjust the upside trade & breakout parameters. ( Stock Price: 135.07 )
TRADE QUALITY 70%, Good
Good trade quality is a combination of good profit, profit/loss ratio and target potential.
TARGET 1 Price: 147.79 Profit: 9.4% , for a typical rally.
Stop Limit/Trailing Stop Limit: 129.96 Loss: 3.8%
Profit/Loss Ratio: 2.5 : 1 - Good
TARGET 1 POTENTIAL Good, there are 1 resistance areas on the way to Target 1.
Stocks may quickly rise to Targets when there are not many resistance areas blocking the way.
TARGET 1 RESISTANCE +6.6% at 143.9 ± 3.17, type double, strength 9
+9.4% at 147.79 is Target 1
TARGET 2 Price: 152.42 Profit: 12.8% , Profit/Loss Ratio: 3.4 : 1 - Good for an extreme rally.
BREAKOUT None
Hi Madmax,
You must be talking about AAPL....
Saleem
SALEEM
YES AAPL
So Sorry that I failed to be clear
Did you sell MA?
Regards
Madmax
Hi Madmax,
No I have NOT sold MA.
Saleem
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