Many are kicking themselves that they have not been the buyer of stocks during this last amazing run up to 9350 on the Dow August 7th, 2009.
For traders that bought up inventory in our Shifty Fifty, the 1/3 that we had not sold before the October fall, it’s been great returns. Our moves to sell 1/3 at 14,100, and 1/3 at 11, 100 and begin buying again at 7400 and lower, the same stocks in our Shifty Fifty, thusly dollar cost averaging great returns on the way up. And Gold has done us well.
Recent call profits have done us well.
For traders that have bought in the last few months or weeks, it looks good, and smart traders should begin taking profits at 20%, but I remain skeptical that it looks good for long term holdings. Following a Fib retracement from the 6400 bottom, the market should first top out at 10,400 to 10,600.
Most technicians, even Bernanke, anticipated that would take a year, with the serious ongoing problems. Krugman and Roubini, who I follow, believe the original stimulus package (not the Bush fraud one where the money went away) would work, but anticipated 1.23 trillion to turn this around, something even charismatic Obama knew he couldn’t pass Congress.
The question really is: will we need more money? Are things really that much better?
The best time to buy a stock is when FEAR leads the market and people are willing to sell at any price.
So, we have some good profits in our core, speculative, and “real $" portfolios, available in the password area at www.bluechipoptions.com .
Now is not the time to buy stocks. It may be the time to buy some stocks. And to do so with tight stop losses. Let's be patient.
VIX is simply a good indicator to tell us how much people are willing to pay for put insurance on stocks. The premiums go up. And that’s the time traders should buy stocks. Watch the volatility of VIX not to lead your decision; right now market sentiment is so obvious that even a cab driver is predicting a fall.
And the other man in the cab with me, sharing a ride, said quite the contrary..."11,000 by Christmas."
Take Prudent Risk
So, we have a bull market. Let’s take it with caution. Hope for some healthy consolidation and a bit of flat lining. That would stabilize the move that has just taken place in the market.
