I'm a little bit like Santa Clause when it comes to the markets: I'm always making my list and checking it twice (plus I sometimes give free things away to good traders on top of it all!). I think that this has been a very important part of my overall success as a trader since 1998 (When I was first able to start making a living from the markets exclusively). I can not say I do not develop biases, and that I'm always equally willing to go long or short, if I said either of those things it would be a lie. I am, however, always willing to be moved by the evidence, both circumstantial and factual. The bear move of the last few weeks has been, to say the least rewarding. It actually helped turn what has been to this point an ehhh kind of year into a now respectable one. The problem with this latest bear move, like the last ones, is that people are too willing to join the cause!!!! Two days into it, âThe Sky is Falling, The Sky is Falling!!!â. Even on that channel for the insane and stupid they started to bring out the bears, not people to talk up the markets. Don't even get me going on the blogs and message boards. If you have had something bullish to say, you have been brutalized. Lucky for me until this point I have not, but we will see what happens from here. Going into the Feds news today not a lot was happening, after the Fed a lot happened and can be, I think, read into the action. First and formost Ben Bernanke should be fired and replaced by my cat Moshe. I thought that the last few years of Greenspans rein unfortunatly negated the first few years of it and he would go down as the worst Fed, but Big Ben seems to want to be number one, and if he can't be number one good, it seems as though he is willing to settle for being the number one bad Fed. In any case the market's recovery from the 170 point tumble was not something to ignore, especially given the recent tone of the market. The fact that the bulls had the ability to come in there and bring it back to positive is, I think, telling of the strength they still have. A good friend of mine who I consider to be the smartest trader I know has a theory that all the money that had been going into second houses, spec houses and home improvement âinvestmentsâ has been replaced by people going into the stock market. From talking to a number of babyboomers that I have become friends with, he may not be that far off. There is not a spectacular list of stocks on either side of the market at this point. If the markets show a weak tone and break support my action will to be simply shorting the IWM again since the small caps have been by far the weakest area of the market. I won't, however, be willing to take as large of a position as I did last time. For potential buying ideas I only have a few idea's I'd like to present at this point. We still have not had a good follow through day, which will be important in getting a low risk buy in point overall, however there are a couple stocks standing out and should they move a bit higher I will start to put on small positions in them now, awaiting a follow through day at which point I will make those positions bigger as well as put a good portion of my money back into a large cap value mutual fund. The symbols I find attractive at this point, both as Companies and as Stocks (this is important, the two are not one in the same) are HWAY, CLB (Core is probably, in my opinion the single best oil company and stock out there. There stock has not always been friendly to me when I have tried to trade it short term, but long term this is a great company and one to own, and add to on breakouts), RIMM, EXPO, PGJ (a bit of speculation on the Chinese here as it tests long term moving average support) EBAY, PG and KO. As you can see there are a not really a lot of names you have not heard of in here, but that has been the case with this rally, its been led by bigger stocks, and as I pointed out earlier small caps and mid caps have seriously lagged (not a healthy long term situation). I have a long drawn out theory on why this is happening, quickly it has to do with the fact that everyone knows of the long term advantage of small caps, and when everyone knows something, its not true much longer on Wall and Broad. I will write more about that at another time, its important but I don't have the time right now to do it justice. I hope this proves helpful to some of you. If it does, as I've been saying feel free to contact me for my address so you can send me a cheese pizza from Giordano in Chicago If your not interested in sending me a pizza, but you have a comment or question anyway you can also feel free to contact me, bfred76 at gmail dot com. Just be aware that those offering gifts of Pizza will be given clear preferential treatment. Brandon
There is not really too much to report. Of the stocks I gave the other day, all are handling the decline pretty well. HWAY took off nicely for a few days and should have produced profits to cover the losses/flat trades on the rest of them. In any case it looks like we are back into the bear market. The Fed is doing what it can, once they lower rates look out..its going to show that they have lost control, it wont be a sign of strength in my opinion. One stock that I do have on my list that continues to do well is the Chicago Merc, CME. It's very near a breakout point over about $600, if it can do that on volume I will speculate on a few shares. Brandon