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Well, regardless of what the Fed is going to do, as "astute" traders you should all be buying puts, they're only getting cheaper. A rally at this point is only an opportunity to continue to leg into a large put position. If you want to get rich, buy puts on the equity indices. If the Fed pauses it will only be to placate the markets and allow big players to continue to "prepare themselves" by unwinding, shifting money, etc throughout all of this volatility. Rates HAVE to go to 5.75/6 because of the inflation. They are doctoring inflation reports (excl food and energy? huh?) to hide the fact that the energy costs are here to stay and will begin feeding through the system IN STEP with a quickening of the housing decline. Not to mention all of the fundamental and structural issues that go far beyond interest rates and stock prices - it's almost guaranteed that we are headed for a slowdown and it's becoming more and more probable everyday that this slowdown turns onto a recession (50% probability of recession according to Nouriel Roubini and OTHERS LIKE HIM) and it could be worse given the current global financial dynamics haven't had to weather a significant crisis and may not handle it well. Throw in geopolitics which are now exascerbated by energy motives and you'll realize that your shopping list should include: a) generator b) canned food and bottled water c) medical supplies d) guns e) OUT OF THE MONEY PUTS ON THE S&P, NASDAQ, AND RUSSELL You don't want to be kicking yourself in Q2 '07 when the S&P is at 900 and still falling... Better yeat, you don't want to be educated and unemployed with NO OPPORTUNITIES to earn an income and DWINDLING SAVINGS/SECURITY due to a whacked monetary system. I'm not a fanatic, and this doesn't look like a false alarm. The only thing keeping everything together is the ability of the talking heads to lie to a misinformed and gullible public.
Most "astute" traders that I know of who have been trading the financial markets for more than a decade or two would be listening to the markets performance this week ( the best WEEKLY performance since Nov. 2004 ) and not place themselves standing in front of a "freight-train" . . . indescriminately buying puts with the confirmation of multi-month double-bottom in the SPX only a few pennies away ( 1280.38 ).
I don't trade based on short term trends. I trade based on intermediate and long term trends. The intermediate trend is still down. I hold my stocks whether short or long as long as they remain in their 50 day regression channel with a 2% standard of deviation. This has been successful for me. I really don't care about daily movements one way or the other. I am short adct, bsx, tie, and arg. The only stock that has moved out of the channel is bsx. I will make my decision on that stock soon, but I wanted confirmation today the stock would move up again and it didn't. Maybe I'm stupid, but I don't feel like I am failing at capitalizing on anything. It's all about controlling risk and money management. If you don't think we currently are in a VERY risky environment then that is fine with me. Personally, I think we are.
Lets keep in mind the dollar got crushed this week. So 3 percent up for the dow minus 3 percent down for the dollar equals nothing. The US is screwed and it couldnt be anymore obvious. The world needs to work out its financial imbalances or eventually the whole system will collapse. its happened before and it will happen again. We can keep ddvalueing the dollar, but that cant go on forever or we could raise rates stop spending and creating more debt, but risk watching asset prices collapse. Its just a question of which way we want to go.
A very famous and legendary commodity pool operator once said, "What is obvious . . . is obviously wrong!" Good Luck.
How is the intermediate trend DOWN in integrated oil stocks, refiners, etc.? How is the intermediate trend DOWN in the brokerage stocks? How is the intermediate trend DOWN in something like Bank of America, Lockheed Martin, or Pfizer for that matter? You talk about trading individual stocks, yet you seem to allow a market index to dictate whether or not you really initiate a position. Your methodology doesn't make sense to me.
You've never heard of trading with the trend of the market? Remember that freight train you were talking about? That's the market. Go against the freight train and you have less chance of success. Yes, you do miss opporturnities, but you also don't get stopped out on a daily basis either.
You still continue to miss my point: We have a market of STOCKS and not a stockmarket. I don't see how your claim would even begin to apply to sectors that have been in such strong uptrends as the integrated oils or the refiners, let alone defense stocks, brokerage issues, or big pharma. For example, BAC is breaking out because we are now just starting to see an inverted yield curve. What does this have to do with the trend of the broader market? LMT has rallied 15% since the end of June on the fact that DoD spending grew at a 20% rate in Q2. XOM, CVX, and VLO have had similar percentage moves off of mid-June lows because of refining margins and the price of crude. If a stock or sector is in a strong uptrend, then why would you be concerned about what the Dow or any other index is doing especially if you are not even trading the index?