Friday, February 1, 2008


Want a thorough look at what's happening in the markets? Well this video from Free Trading does just that. As you may have read, I am still bearish so I strongly agree with everything this video has to say. Just to sum it up, we're currently experiencing a 'suckers rally'. With the market closing up, there are more and more bulls everyday. Fears and concerns are starting to fade away and this is when the amateur starts buying back the stock market. This is exactly what institutions want, they want you to buy into this mess...this 'suckers rally' gives institutions a perfect opportunity to sell into this bounce. At this time we are still in a downward trend, instead of looking for opportunities to go long, start looking for opportunities to short.

Give this some thought: With today's poor job statement the market should be experiencing a negative vibe, instead there is a positive outlook. Mergers and acquisitions (M&A) are giving people hope. Refer back to the video...what's happening to the big four? If institutions were buying right now, shouldn't prices be rising significantly in these four stocks? Institutions do have investments in these stocks, but are now finding opportunities to sell as amateurs buy. M&A is just an excuse for the market to stay afloat, without this M&A news, institutions would not be able to gradually get out of their long positions. An aggressive .5 cut shortly after a .75 cut should spark a massive rally, instead we got a small rally followed by heavy selling led by the institutions.

Disclosure: I bought SDS today to hedge my long position in APP. May have bought it too early, we'll just have to wait and see. Also, my recommendations of BHP (1 day ago), HOLX (2 days ago), WYNN (5 days ago) and YUM (2 days ago) would've made you around $7, $6, $15 and $3 respectively. As you can see I am an active trader, I would've sold all these stocks by now. This is why I don't pitch any of my stocks here, instead I post them on forums and only post my longer-term recommendations on my blog. If you want specific stock picks, leave me a comment.

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