Monday, November 17, 2008

Notes for 2009 Due Now

Top Line: This is options' expiration week which has the potential to move this market up. Asian markets are down in sympathy to the down day in the US but the US futures are about flat on the evening.

As we look back over the past six weeks or so, specifically back to October 10th, we see the news continuing to be very bad but the market is not really moving down with the news. The QQQQ, or the NASDAQ 100, NDX, has fallen to a lower low than October 10th but only a modest one. The news, with it's acompanying selling, has not been able to push prices down very far. The news has been just terrible but the stock market has stopped going down.

The market is in a difficult period of time. It's trying to buck the news. The economy is showing bad news but the market is done going down. We realize that the market can go down more if it wants to but the October lows are pretty solid for the broader market. Some stocks are lower now than they were back in October but not all stocks trade the same.

These are the times that don't make a lot of sense when trading the stock market. The market has been very volatile which is being reflected in the volatility indexes but it's not actually putting in new lows. These are powerful messages being sent by the market that it doesn't really want to go down.

We can only look back on the past several weeks and say that we should have been trading more. The market has come down from around 14K about a year ago so now it's trying to turn itself around. This is not an easy task and because of this provides a lot of back and forth action. The problem here is that the back and forth can whipsaw you unless you have impeccable timing which is almost impossible. These times make it very easy to lose money.

For now, the market wants to squeeze as many part time bulls out of the market and entice them to turn to bears. For those of you who are wondering what to do, we recommend that you write down some of your thoughts about what you think you should do, along with how the market is trading. Make sure you can keep these notes for about six months so you can look back and see what you were thinking. Wouldn't it be nice to have something like that from a year ago?

How about a nice pic of Jackson and Grampa?

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