Understanding our Dow Projections for Daily Trading
"As of June 3rd, U.S. Stocks have underperformed long-term Treasury bonds for the past five, 10, 15, 20 and 25 years. We all have heard though "that there has never been a 30 year period since 1802 when stocks have underperformed bonds. This theory is unproved, and comes from Stocks for the Long Run, by economist Jeremy Siegel. As usual, this is an extrapolation of data that is "interpreted".
To Floyd thinking, stocks are not to be held forever, and are to be used as vehicles to "trade for profits", whether from index options, or actual stocks or stock options.
We suffered our fourth weekly decline in a row, the longest losing streak since the spring rally began in March, and lowest close since before April." WSJ
“Buy and hold” is over. The baby boomers, and the retired generations see this now in portfolios barely breathing.
But we do not advocate not trading stocks, or investing blindly in index funds (The Bogle Thinking) that have now proven the downfall can be as great.
It’s simple to me. When I make money in a stock, typically 20%, I sell 1/3 of my position. If the stock continues to rise, I sell another 1/3 at profits in 30 to 37% range, and I hold the final 1/3.
At www.bluechipoptions.com we also are proud believers in NEVER selling at the top.
Last year we saw GREED so rampant, and values that appeared unrealistic (no, not a clue about how bad it was going to be) and we recommended to subscribers to sell 1/3 of all holdings at 14,100, 1/3 at 11, 200, and to hold the rest.
At 6700 we recommended to subscribers buying up many of the same issues, vastly increasing their positions.
We hold three portfolios, available to subscribers only:
- Core Stocks
- Speculative Stocks -short holds, breakout or value stocks
- “Real Money Portfolio”-When we moved out of stocks last year we recommended 15% of your positions should be in Gold GLD or Canadian Exchange Fund (CEF) We’ve recently sold 2/3 of our position out on GLD at 45 to 68% profits, and continue to invest in lower cost CEF (which also covers Silver) and have made recent recommendations for short term puts on GLD, with re-buys when Gold hits 870.00 to 820.00
Recently we recommended “slimey old AIG” for a fast stock trade, and were in and out in 3 days for 22%.
We use the Dow as a perfect “media sentiment” of the market at large. Weekly we provide projections on the www.bluechipoptions.com website, and in our core service www.oexoptions.com we provide detailed daily updates that helps us trade index options.
