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[Weekend Summary]
Dear Member:
Well, I closed my Robert Half International (RHI) trade for a 30 cent gain in 6 days this week. That just leaves me in my Nuveen Senior Income (NSL) position. The NSL has held at the uptrend line and that is encouraging in the face of the fairly precipitous drop in the market.
I didn't buy anything new because I DON'T WANT TO TRY TO CATCH A FALLING KNIFE! Most individual stocks follow general market direction and for now, that is down. Each of the major indices have fallen pretty dramatically on strong volume since the Fed announcement. It's too early to tell whether this drop is simply a retracement on some profit taking or whether it is the precursor to a more serious bearish move. At a time like this, I think it is better not to hold many bullish positions at least without tight stops. In the Option Trader alerts, I advised that I was buying puts on QQQQ. QQQQ is a stock that represents the Nasdaq 100 and puts are expected to go up in value as a stock goes down. I bought the Dec 40 puts yesterday as a hedge and as of close today, they were up 13.7%!
Even if we are entering a new bear market, there will be sectors moving counter to the overall downward trend and that's where Trend Trader will look. For now, I am awaiting some clarity as to what the markets are really doing and as soon as I think I can tell, I'll be buying stock. I expect that should be sometime next week.
In the meantime, remember not to get under a falling safe and have a great weekend.
Bill
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