>>> Where is Dabum? In the garden? <<<
My garden is rewarding me for all the work I've been doing of late.
Of all the gin joints in all the world, you came to mine for an analysis of the markets.
About a month or so ago, Susan Byrne, the Diva of Dallas, was on CNBC. (Susan is the analyst that was pumping KWK while we were shorting it.) Now Susan is the ever optimist about the markets and this bothered me some, especially since I have a secret crush on her. Susan, Susan .... how can you be so optimistic when the markets are doing so poorly? C'mon, don't destroy my image of you!
Susan said you shouldn't focus on the downside, something is always moving up, you just have to look for it. "You just have to look for it!" I like that.
As you are aware, from private messaging back and forth, I have chosen to stop playing the market short. I have made this decision, not because I don't think there isn't any more downside to come, but because we have dropped so far, I think there are better short term opportunities to the upside.
Earlier in the week, I mentioned to you that the SOX was positioned for a technical move to the upside. I also mentioned that I took a large position in AMD because it had been recently upgraded and I thought it would benefit from the move in the SOX.
AMD has had a nice move this week and I sold 80% of my position into the close today.
stockcharts.com[h,a]daclyiay[pb10!b50!b200!c20!f][vc60][iut!Lh14,3]&pref=G
If it pulls back next week, I may buy it again, depending on the technicals and the condition of the market.
I think a sideways market is beneficial from the standpoint that there are more bulls out there than bears. It's human nature. I plan to continue following Susan's advice and look for the sectors and/companies that look like they are due for a short term bounce.
Will the market fall further? Maybe. But what percentile are we dealing with? Six months or a year from now, will we be looking at a chart that shows this point in time as the bottom 20%? If so, wouldn't it be prudent to focus on the 80%?
Even in the worst of times, something is always going up. Most of us weren't able to participate in too many sectors because we followed fundamental analysis and there's only so many companies you can follow with this methodology. Technical analysis allows us to follow the entire market. It doesn't matter what sector you look at, if a price is closing up and over a 20 dma, you know the price is rising. If the volume is above average, you know institutions are buying. Follow the money.
Now if you'll excuse me, Susan and I have a plane to catch, while our good friend Rick keeps the inspector at bay.
Play it again Sam!
dabum |
