Thursday, February 12, 2009

Clarification on Earlier Post

People have just asked me:

Are you now long the financials? Why not short anymore after killing them in each previous post?

Easy Answer: I don't like the financials, there is not ONE FINANCIAL STOCK I would buy in America.
But...then again...Trading is an ART FORM....The most important thing when trading stocks is to keep your eye on the ball. Opinions don't matter. Do what the market is telling you. Always take the profits when they are there to be taken. Always live to fight another day! I am quite concerned that the banks can go down further, but I am more concerned about a super short cover rally that would obliterate my profits. Its all about execution!

I personally think that the financials will be a lot lower then they are today, 1 month from now, 3 months from know, will they be around 6 months from now? Who knows? I have my opinion, I think I am right, but what good is it to be short for the right reasons, and the market is ripping against you? Bottom line- Do what the market is telling you. The market is telling me that 7500 could lend to be some sort of support, thus some short covering will kick in and take the mkt higher. BTW- the financials are the most heavily shorted sector on the street, you don't think they will rally 20-30% if things ignite?

The one problem with living on the short side is there are times when all of the facts say down, but the market is ready to move higher and against you. You have to be able to realize that you are wrong regardless of what the facts say. EXECUTE!

You like the market now?

EASY ANSWER: I like the NASDAQ names better. I have said previously that the NASDAQ has stopped going down. Its an Opinion. I hope it works out.
I still think the market will test the lows in November when the DOW hit 7500. I don't think the S&P 500 will test the lows at 740, partly because the NASDAQ has outperformed (Relative).
I think the S&P bottoms at 790-800 Short Term.
I am looking for a bit of a rally after we shake people out from here partly because of:

1- Detailed information on Housing Package from Geithner & Obama
2- To much short term negativity- Long term its justified.
3- Outperformance of NASDAQ Horseman - INTC MSFT CSCO ORCL GOOG - It looks like these stocks have finally stopped going down.

Hey- Am I saying the market has stopped going down, Green Light from here? All systems go?
NOPE- Just that all of the MOONS are positioned for a bit of a rally soon, regardless of the facts.

Happy Trading-


  1. true that, Jay baby!
    Being right doesn't equate to making money. Look at all the best soothsayers on the economy. Peter Shiff for instance called the economic downturn beautifully over 1 year ago, but if you followed his investment advice, your losses in 2008 would have way outpaced the losses in the S&P!
    What Jay baby is saying is totally right. Sure, the market is headed considerably lower, but don't be shorting now when we are enshrouded in negativity and the prospects of a short squeeze bounce are looming, to conflagrate any day now. The biggest percentage rallies before 2008 happened in the early the early mid 1930's, right smack in the middle of the great depression!
    -ash trader

    Thanks for the comments!

    Nobody is an expert when it comes to the market. Everyone has an opinion. But what's the difference between people who make money in the stock market and the ones who are left holding the bag? ONE WORD - EXECUTION!