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[Weekend Summary]
Dear Member:
What a wild week in the markets! I've been warning about a bearish tendency for the past several weeks. In many respects, the past few weeks have been a demonstration of how emotions can control the movement. Of course there have been credit issues and as soon as some money was taken off the table the markets began to descend at a faster and faster rate. The fed move to lower the rate before market open on Friday served to turn things around, perhaps more quickly and with greater acceleration than logic might have dictated. By the way, do you think the fed cat may have been out of the bag to some of the big boys before the public announcement? Just look at the market behavior on Thursday -- a big reversal after the markets were really tanking. I don't know, probably just a coincidence that the announcement came the next morning. What do you think?
In my estimation, the fed action was good, but just a band aid. If we think there are problems with mortgages, what is there with credit card debt? That chicken will come home to roost one day and will rock the markets. The credit card companies were smart to lobby Congress to protect themselves when the recently revised bankruptcy laws were enacted. It seems to me that while there has been a little fix with the fed action, the credit problems have not disappeared. For that reason, I believe those with hedged positions who are also watchful for a return to the bearish side may be well served. That is not to say that bullish plays cannot be profitable. The bulls just need to continue to exercise caution and realize that one day does not a rally make.
I closed a decent trade in Harmonic (HLIT) for a before commission return of 4.57% in only 6 days. I also entered a position in Fx Energy (FXEN) on Friday and the stock price moved higher after my entry.
Blackrock Senior Hi Income Fd (ARK) made a very strong recovery over the last couple of days and continues to be my income producer in the $10 and under category.
Introgen (INGN) is still sliding sideways and as I write each week, I am holding this position awaiting word on final phase trials of the cancer treatment currently underway.
Just because the markets turned back up today does not mean the bull is necessarily back. I still believe careful selection and tight exits on reversals will continue to be key with all stocks, particularly the cheaper ones for now.
Have a great weekend.
Bill
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