Monday, September 14, 2009
Well, no this is not"Elm Street", "Friday the 13th" and neither Jason or Freddie are here. Yet. So is it time to be scared?
YES ! Yes it is time to be afraid. Scared, but prepared. Gold cant make up your mind whether it wants to vault up over $USD 1,000, the DOW is where it was on 9/11, and generally everything seems OK, for the moment. The patches on the hull of the ship, i.e. USA and World Economy seem to be holding, and Scottie given us impulse power and the warp engine is expected to be online shortly. Expected, not guaranteed.
From 9 March to present is a credible Bull Run, albeit with lessening volume. To date, one can see and understand volume leakage, away from many of the measured markets. Certainly some former market participants have been traumatized if not ruined. They are no longer in the game. Funds have been taken off the table by big players and switched in to different asset classes. My guess is a small fraction of that, probably lo single digits have found their way into longer term physical investments.
What should I be scared of, afraid of, aware of ? Probably a correction. Dire predictions and warnings abound that "the end of the world as we know it", being right upon us. Well it is, probably in some small measure, that each day some part of our known life and culture passes away, but is replaced by something else. CHANGE.
Does that mean 8K on the DOW ? Perhaps? Gold @ 1500 $USD? Maybe. Rebound hi for the DOW 15K? Low for Gold $600? Probably not. This is the place that is the reason STOP LOSS or TAKE PROFIT Orders Exist. The experience is that if they order is too far under the stock, and a GAP DOWN occurs, you get taken out at the bottom of a correction. Better you carry a stop order at a percentage (%) below the current market, where MM's and Specialist and Desks arent looking when they go hunting for STOP ORDERS to trip off.
If folklore held true and was consistent, it would seem we get a correction rather than another market smash-down, because, in my observation, the correction is occurring amongst the same group that took us UP. Folklore has it that the two directions are led by two different groups, hence if this were a Change of Trend from Bull to Bear, a different group would be leading. FWIW, I adjust my stops and observe, and write PEAK PERFORMANCE PICKS, and take profits along the way. You could too.
If you'd like a free look at a recent issue of PEAK PERFORMANCE PICKS, please drop me an E-Mail request to: "firstname.lastname@example.org", and I will send you one of my previous issues.
Meanwhile, ready cash, dry powder, and good stops will be your best friends.