[Weekend Summary]
Dear Member:
Each week, I try to include a paragraph or two about general market conditions that I send to subscribers of $10 and Under, Trend Trader, and Option Trader. This weekend, I think it is particularly important since the markets as measured by the Dow 30 Industrials, Nasdaq and SP-500 remained in bearish mode. Wednesday did give some hope for a rising tide, but until there is a follow through or until the markets capitulate (neither of which has yet occurred) it looks like the direction remains down.
Downward market direction is significant because most stocks follow the overall direction. Option Trader is the one that has been making money in this market. As subscribers to that service know, I closed a spread on the Diamonds (DIA) for a realized return on risk of 81.2% before commission in 6 weeks. I also closed a part of my bearish put position on QQQQ today with a 25% realized gain on the contracts closed. Indeed, money can be made when the markets fall, but generally speaking, the money must be made with bearish strategies. Of course, the markets will turn back up, we just don't know when that will happen.
Option Trader is designed to take advantage of whatever direction the market takes. Trend Trader and $10 and Under each are more dependent on a bullish market direction since the only strategy employed there are bullish, i.e. buying stock. I am very wary about establishing new bullish positions in a down market and I, therefore, have only two active Trend Trader positions, one of which is up and the other down as of Friday's close. In the $10 and Under category, my positions are small, and though I added a stock this week, the general performance of those cheaper stocks in my portfolio is currently poor. Unfortunately, in a bearish market, that is to be expected. When the markets turn back up, I would expect to enter more bullish positions and enjoy additional successes. In the meantime, my general inclination in Trend Trader and $10 and Under is to stay mainly in cash. It is every bit as important to my mind to know when to stay out as it is when to get into positions
The Nuveen Senior Income Fund (NSL) that I own primarily for income since it pays out such a great dividend monthly continues to do well. JOBS has essentially been flatlining since mid-June. It hasn't broken down through support so I haven't received the signal to get out. Stocks that make a solid base as JOBS has been doing often make a very nice move out of the base.
Have a great weekend. I appreciate your patience and understand how difficult it can be, but there is no point in trying to catch falling knives.
Bill
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