Hey Gang,
I am writing this afternoon in a different fashion than normal. I am not going to back this post up with charts or stats but rather communicate some of my opinions and observations of the current market environment.
I received several emails today asking me what I was looking at or thought about the current market as is. I hadn’t made many changes to my trades today except for taking some partial profit on DE calls and selling some of my UYG stock at open. I entered a call position on NEM on market open as well. As I thought about the market today and surfed the news…my mind was clouded. I can’t help but feel that this makret still has legs to move higher yet much of my technical training says that I should be out of calls and more into puts for the very short term.
As I sorted through jumbled thoughts, I made no new trades as the market closed. Did I make the right decision? Am I weighted to heavily to the call side? Should I have more puts for protection? As these questions raced through my head, I took a walk. When I returned to the office, Jim Cramer was speaking. I respect Mr. Cramer and his opinions even though I disagree at times. He was discussing how the market still has significant issues and problems…that stocks like CAT and NUE have moved too high to be owned.
I then sorted through some of the news sights that I frequent…profit slashing, layoffs, scandals, power struggles, negative bond yields, rising yen, bird flu….CAN IT GET ANY WORSE? Of course it can…but will it? My mind raced back to October of 2007 when I turned on a tv program and heard the term ‘Goldilocks Economy’…I remember feeling sick to my gut as I realized that there could be a hard fall as the optimism in the market became excessive. A similar gut feel is what compels me to stay bullish…the run is not over…just begining. The negativity is just too thick. There will be bumps along the way, but a market recovery followed by economic recovery feels near.
While puts have been good to me over the past 2 years, I struggle to see the market in a bearish light now. The masses have no desire to own stocks…people are still fleeing their IRAs and 401Ks. Hedge funds and broker houses have gone belly up…where will the money come from to push stocks higher? I have theories and ideas, but it doesn’t really matter. I have to trust my gut and use my training to confirm my intuition.
So what’s the point of my rant…bullish rationalism? a trader rambling? Maybe…but I want you to understand that gut feel plays a part in trading. Discipline, money management, and technical abilities are crucial for success but during your learning…listen to your gut…learn to trust it. That intuition is what makes the greatest of traders successful!
Happy Trades,
Jeff
No comments yet.