Everyday, I get at least 10 - 20 e-mails asking me to help understand market conditions and every e-mail wants me to run my Magic Ball and predict what is in store tomorrow.
It becomes very difficult to explain the this is not a game of magic ball but this is all based on Probability of an outcome. You may be wrong initially, but you dont have be always wrong forever, you flip around and join the right crowd.
Markets have been chopping around for past two months now. The rally that started on June 1 from 1280 area too us all the way now to 1400 area.
Now we sit at close to yearly highs of 1422 and we wonder what does market have for us in upcoming months.
Hold or Fold is the question asked everyday? On every forum, every blog.
I will try to put my unbiased view on this subject.
First of all, one need to shed the worries .. Oh . .this will happen .. Oh.. that will happen.. There will be QE3... there will be inflation.. There will be debt crisis etc etc..
Charts and price action will tell you every story that you need to understand, everything else is just what my kids asks me every night to tell them "A Make Believe" story.
Since last couple days Price action is very inconclusive. We broke out of the range of 1420 and then we fell back there. What is this telling you that yes there are promised made for QE3, Economic supports etc but nothing has been concretely defined. Till this definitions does not arrive, we will continue to see this messy chop factory.
Market players move their hopes and expectation from one federal or government announcement to other with an expectation that something concrete will come out. Your and my job is not get entagled in these " "Make Believe stories" that circulate around
Our job is to make money of market. whatever be the conditions.
Again going back to the subject of What's Next. I cannot really tell you what's next .
What I can tell you, there will be an explosive move. Why?
1). We are in Presidential Cycle.
2) SPX made a nice 100+ point move from the lows of 1277 from 1st of June
3) It is consolidating with SPX sporting a Flag pattern on Weekly Chart.
4) On Daily basis, there is a tight bollinger squeeze setting up.
5). VIX made a yearly lows in the 14 area and now its returned to its normal 17 zone.
6) Concrete QE3 definition will be announced soon
With all these conditions, market is all primed to make a super move. Which side time will tell..
So how to approach this type of situation:
There are couple of ways
1) Buy SPX and buy Volatility hedge with VIX calls (not with VXX)
2) Short SPX and buy Commodities like GOLD and Silver
3) Just sell everything and wait for the market to tip its hand first. If market breaks out then go long.
If market tanks then get short.
Also I will be starting my 2012 mentoring class from Sept 23rd Sunday. There are couple of folks who wanted to join last year but did not make to the first 8 list, I promised them they will get the first chance.
I plan on taking 10 students again this year.
If interested please send me an e-mail on marketing1977@gmail.com. It is first come first serve. It is all free and in return I expect you to put in hard work for 4 to 6 weeks and in future help mentor other people.
It becomes very difficult to explain the this is not a game of magic ball but this is all based on Probability of an outcome. You may be wrong initially, but you dont have be always wrong forever, you flip around and join the right crowd.
Markets have been chopping around for past two months now. The rally that started on June 1 from 1280 area too us all the way now to 1400 area.
Now we sit at close to yearly highs of 1422 and we wonder what does market have for us in upcoming months.
Hold or Fold is the question asked everyday? On every forum, every blog.
I will try to put my unbiased view on this subject.
First of all, one need to shed the worries .. Oh . .this will happen .. Oh.. that will happen.. There will be QE3... there will be inflation.. There will be debt crisis etc etc..
Charts and price action will tell you every story that you need to understand, everything else is just what my kids asks me every night to tell them "A Make Believe" story.
Since last couple days Price action is very inconclusive. We broke out of the range of 1420 and then we fell back there. What is this telling you that yes there are promised made for QE3, Economic supports etc but nothing has been concretely defined. Till this definitions does not arrive, we will continue to see this messy chop factory.
Market players move their hopes and expectation from one federal or government announcement to other with an expectation that something concrete will come out. Your and my job is not get entagled in these " "Make Believe stories" that circulate around
Our job is to make money of market. whatever be the conditions.
Again going back to the subject of What's Next. I cannot really tell you what's next .
What I can tell you, there will be an explosive move. Why?
1). We are in Presidential Cycle.
2) SPX made a nice 100+ point move from the lows of 1277 from 1st of June
3) It is consolidating with SPX sporting a Flag pattern on Weekly Chart.
4) On Daily basis, there is a tight bollinger squeeze setting up.
5). VIX made a yearly lows in the 14 area and now its returned to its normal 17 zone.
6) Concrete QE3 definition will be announced soon
With all these conditions, market is all primed to make a super move. Which side time will tell..
So how to approach this type of situation:
There are couple of ways
1) Buy SPX and buy Volatility hedge with VIX calls (not with VXX)
2) Short SPX and buy Commodities like GOLD and Silver
3) Just sell everything and wait for the market to tip its hand first. If market breaks out then go long.
If market tanks then get short.
Also I will be starting my 2012 mentoring class from Sept 23rd Sunday. There are couple of folks who wanted to join last year but did not make to the first 8 list, I promised them they will get the first chance.
I plan on taking 10 students again this year.
If interested please send me an e-mail on marketing1977@gmail.com. It is first come first serve. It is all free and in return I expect you to put in hard work for 4 to 6 weeks and in future help mentor other people.
