[Weekend Summary]
Dear Member:
Even with the huge bullish day on Tuesday, the Dow, Nasdaq Composite, and S&P 500 stayed within a stone's throw of their close last week. Volatility reigned supreme and increasing volatility is often a sign of a continuing downward direction in the market. The Fed is certainly trying to keep the lid on and there is even the thought that if may lower interest rates as much as a full basis point. Of course, the problem with that is it could feed inflation which is also a market enemy. Bear Stearns (BSC) lost almost half its value today on a downgrade with the suggestion it go become worthless. Clearly fear is driving the markets for now. The good news is this isn't the first, and quite likely, won't be the last time that fear has ruled. In my view, and as I have been contending for quite some time, it is not yet the time to dive onto the bull cart. That time is coming, and when it does, there will be an abundance of candidates.
In keeping with my analysis in the first paragraph, I only made one move this week in Trend Trader, buying shares of ProShares UltraShort QQQ ETF (QID). Of course, "Murphy's Law" immediately came into effect and the market rocketed the next day. I stayed with the position though because the share price dropped to, but not through the trend line and it now looks like things are moving back in my direction. In order to progress, QID needs to break resistance at 56 once again. I suspect there is a pretty good likelihood it will since it seems the Fed is running out of tricks to keep the market from really dropping. I would rather that not be the case, but if it is I'll try to profit from the added gloom.
Evergreen Inc Adv Fd (EAD) dipped to a support Friday, but it is of little concern to me since I am holding the position for the regular income it produces; and it is doing the job in that area.
Ceragon (CRNT) remains deep in the dog house and is kept only as a vehicle to write covered calls or until I have held it long enough to have a long term capital loss (or gain?).
We are getting closer to the time the markets will turn, but so far, I don't see it. When it does, it could provide a really good ride.
Have a great weekend and thank you for subscribing.
Bill
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