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Market Perspectives |
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The stock market has experienced a nice run over the last several months. As we approach August which is normally a pretty calm period some observations are in order. September starts the weakest or period most likely to be down for stocks and the market in general. October can be the most volatile, but September is the most dangerous to investment success. Personally for my retirement account, I go into cash during this time frame. Although the general market direction has been positive, many stocks really haven’t participated in this rally. It has gotten harder to find stocks with healthy fundamentals that are reasonably valued. I love Google, but am not sure how to correctly determine its value. I have made money in several oil stocks, but was burned last year about this time when they sold off sharply while still reporting record profits. I have determined that the best solution for me is to trade in the shorter term. I like being in cash over weekends and holidays. I believe from the news that most of the things that can happen during those times are negative. So my philosophy has been to look for opportunities where the probabilities are for a move in the direction we have forecasted. We have developed an indicator called Casino (because the odds are in your favor with it, much like a casinos). We have developed a web site dedicated to teaching our system, it is www.tradingunlimited.org . Our experience is that the institutional investors drive this market to a degree never before experienced. They for all practical purposes control stock prices. You are investing against people who have access to expert information not available to us as regular investors. That is why I developed our indicator to level this playing field. My trades for the vast majority last 1-4 days, and then I am back into cash. For those of you that are hardy
souls that like to be in stocks all the time, I recommend going into cash
until the third week of October and then going back into stocks through
January. Most years the bulk of market gains occur during that period.
Over the long term, I still like energy stocks, and stocks that take
advantage of global growth that is stronger than here in the |