I'm going to share a few ideas. I typically predict the direction or just trade the ES. This does not mean, repeat does NOT mean, that I can't do more. First, I have to admit this rally surprised me. It rarely happens that I get surprised. It certainly feels "different". INTC has touched $27 which is a magical number. This is big.. I'm not saying that INTC will go up or down from here ( I can predict it but haven't ). However. I note this.. WMT/Poor people. WMT has been underperforming. Rising gas prices will likely crimp the people who shop at WMT (like me). This is a good short as rising gas prices will crimp our ability to buy basic stuffs.. This whole idea can be extended to the discretionary sector. Financials These look to be recovering and could easily outperform if the market goes higher. Metals I like the commodities over the metals. These are volatile markets though. Not much experience in them. Transport I like transport. A better economy means more shipping. Health Care Hold on this sector. Political heckling bodes ill will. My basic sentiment: Consumer Discretionary Underperform Financials Outperform Commodities Outperform Technology Under perform near term, outperform longer term. Transportation Outperform Metals Wild card Health Care Underperform
So rather than trying to predict which direction the only thing you can be certain is, the stock will go up and down at some point. Why not use a strategy that makes money with the stock going up and down?
The only way to make money by actively trading is to predict what the market will do in future (in some way shape form). The fact 99% of people don't understand this probably explains the 99% losers.