Indices have just "broken out"of their recent trading range...which was considered a "breakdown point by many".....
When "technicals defies logic"...pay attention.....
Many traders/investors are trying to "rewrite history"...by WAITING for a serious pullback...chances of that happening immediately ahead is not very high.......
Effort/Energy/Due Diligence..should be on what to BUY than an "endless WAIT for a major pullback"
Too many "smart traders are shaking their head in DISBELIEF"...so do NOT join that army of disbelievers..as its list IS growing LONGER & LONGER.....means MAJOR chase the rally phenomenon will take place.......
Too many traders/investors/mutual funds/hedge funds/pundits are looking "way behind the curve"..when it comes to their performance compared to peers & ordinary investors who followed $ cost averaging and kept investing for future......
Can you IMAGINE..how under-invested traders/hedge funds will look when their statements are released ending September.....Market is UP 54% and they are UP 5%...NOT a pretty picture for any social gathering or for their business/self esteem/COMPETENCY....
The most famous line which is being used for last 3 months IS..."we have come too far too fast"...I beg to differ completely......we ARE barely REPAIRING the damage in markets in a very "orderly manner"......
Most mutual funds/hedge funds have lost 35% to 40% equity for their clients ....even with this latest 54% rally...your latest statements will prove that......
So ....you WANT to FIGHT this TAPE & be a NAYSAYER......????
Which will only mean that NOT only you lost horrendous amount of EQUITY from Oct of 07 & became defensive near LOWS..BUT are stubborn to accept the verdict of this TAPE..so you are NOT positioned to RECOUP your lost equity...does NOT sound like a good plan to me????
Markets go UP & markets go DOWN.....a fact of last 80 years....
SO..are we positioned for a market which IS going UP...cycle generally last for 3 years...based on history......
YES,YES & YES..there will be correction of 3% to 9% periodically...but the UPTREND will take us way way HIGHER than those manageable risk......
I personally do NOT know when the next correction will be..BUT i DO know based on current TAPE that risk/reward ratio is/has been pretty GOOD......
BUT...the most important thing to consider IS ..your OWN comfort level.....IF you CANNOT sleep well @ night......then it is NOT worth being in the market...HEALTH comes BEFORE WEALTH for sure........
Here is the current prediction for the market by www.stockcharts.com
DOW 10,200 closed @ 9506
S&P 500 1295 closed @1026
Nasdaq 2210 closed @2020
These are targets by a technical outfit.......
My BULLISH thesis is based on fundamental CHANGES taking place in worldwide economy....those are MACRO views.....
Yes ..you CAN be fixated on MICRO views about opinions of bears OR where Shanghai closed last night OR how high unemployment will go ......BUT in the end MACRO picture is what IS propelling this market HIGHER.....
BUT...it is your hard earned money..so you have a responsibility to make it work for you..however you want to position it.......
No matter what you decide to do.....good luck with your OWN strategy.
BLOG does NOT give buy or sell.
Saleem
7 comments:
Hi All,
Covered writes in a bull market are not a good idea. You can and will lose higher profits. It's best to wait until the week before expiry and take a out-of-the-money call. As far out as possible and still make it worth your while.
Best Regards
Hi Saleem,
Oil 74+ barrel
Baltic Dry Index (BDI) -31 2437
Gas ATL $2.59
Best Regards
Hi Standards,
Thanks for your take in covered write for bull markets....
BDI going down still..is a major surprise for me???
Saleem
Hi Saleem,
Sold V $$
BUCY and GE called away $$
A profit is a profit.
Best Regards
Hi Standards,
YES....profit is what we are ALL hoping for...
Great idea to book profit $$$$
Saleem
Saleem Standards
We were all like deer in the headlights--GE is an example of the mrket changing and we could not change fast enought to stay ahead of the game
But I still made a tiny profit and compared to 3 months ago the market is balsting sky high. Had we call know we would not have written coverd calls in an up market.
I could not forsee the up wave coming,
GS and my FNM are up hugh I should have gotten more of FNM and Citi bank, not to late to get some!
The very best to you all
Hi Madmax,
Always have sell strategy.....
As stocks CAN retrace in a hurry also......
Saleem
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