Can nothing stop this raging bull market? Ok, for those looking for a continued move higher I apologize up front for that opening question (bad karma effect). Seriously though, the strength of the market is something tomarvel at. We’ve talked many times about the ’causes’ or ‘reasons’ – and frankly we don’t care about them until there is a shift in direction. We generally take our cues from the market. However, do you find yourself at times trying or wanting to predict the change? I used to be that way, too. I have also lost my shirt trying to front-run a market trend. We all have to be mindful of that change and be ready but to make that call over and over is just futile. Not only does it play games with your wealth but your mind also. Have you found yourself saying ‘enough is enough, I’m outta here because the market has to go down’? Raise your hand up high – hmmm, I see quite alot of you are raising your hands up. I understand, I’ve been there, too. Don’t think you can tell the market what to do – if you’re uncomfortable being long, that’s fine…but don’t make predictions, that’s for the pundits and the guys on the sidelines looking for ‘one time’ fame. As a trend trader I choose to follow trends and trade on them RATHER than calling for ad change in trend – which is what you’re doing if you are timing the market. You can get lucky timing the market – once, twice maybe more – but how many opportunities between the turns did you miss? Plenty, I would imagine. Pay attention to the trends in front of you and go with what you see and not what you feel.
Another good week for the indices as the SPX exceeded the 100% retracement level from the March 2009 lows. It’s been a remarkable turnaround that doesn’t seem to be finished. Volatility is still low as the VIX shows up under 17%. Realized volatility is quite low here at under 10%, complacency that can be worrisome (but is not right now). Breadth was strong all week long. Silver broke out new 31 year highs, gold seems to be ready to fire up again. The dollar was weaker during most sessions, fueling commodities to rise. China may be hiking rates again soon but that doesn’t seem to stop the bulls from buying. Broad sector strength was the key this week with the transports confirming a Dow Theory buy signal. Industrials, metals, durables, financials and tech have been driving this market higher. Bond yields are levitating here as the steep curve is reflecting some nice economic growth (the bond market ALWAYS gets it right).
Below is a chart on EOG – a trade idea we put out this week as an earnings play in the trading room. It turned into a HOME RUN. Not subscribed? Here’s an easy to way to do it and receive timely email alerts to take advantage of the trades (click here). Also, ONE WEEK left on the offer for free access to the trading room – this ends in February, so why not join in, make a few bucks on trades then pay for the service with some winners? That’s what I call making an investment in YOU (click here for free access to the trading room through Feb 28). You can ONLY get access by signing up for a service, so DO IT NOW!
Have a great long weekend!