I will be back on Maui tomorrow after one of the best weekends I have had in a VERY long time. I will resume normal posting after almost two months of partial-posting. With a pullback in the market that is throwing up a lot of sell signals and is giving me the “take cover” signals, it will be nice to start to be able to talk about something different than “we are up again and hold your longs.” While it is never a favorite of most people for the market to be going down I want to remind you that it doesn’t matter what way the market is going (up or down). What matters is if you are making money. Right now, as I travel I am not taking any new long or short positions. However, if you remember, when I was on the Big Island I did take longs. Why? They were giving me long signals and making me money. I do not have any CLEAR long or short signals but do have some possible “early (usually given to PLAT members only)” longs/shorts for you to look at if you want to make money. While I could take these positions, truth be told, I do not feel the usual confidence that they will work.
Nobody can EVER predict the future, but history tells me that while the bear markets can start fast, we will need some backing and filling before the past rally leaders give us CLEAR short signals. If you are brave and like to trade early (ie, you don’t mind being wrong more than me with my methodology), you may start shorting stocks now. Who knows, we might not get a real chance if we sell just like we rallied. Maybe another uptrend will come from this bear. Maybe we will continue to sell off for another year. Nobody, and I repeat nobody, knows. The only thing you can do is be prepared to go long or short whenever you get your signals and remember the best time to go long is during an UPtrend and the best time to go short is in a DOWNtrend (like we are now under–with distribution days). Keep this in mind when you try to go long in a bear market and when you try to go short in a bull market. Also remember me going long a stock in a bull market and me going long a stock in a bear market entails two WAY-different dollar amounts. There is no “hard” rule book to this. The most important thing to remember, also, is that while trending is the name of our game, anything can happen. We could rally on huge volume tomorrow and within a week setup new longs. Get over it! This is the REALITY of the stock market. Not the BS and pure hype that you read on most websites and see on that God-forbid channels called CNBC, Fox Business News, or Bloomberg. They are trying to distract you from the truth and too many of you are buying it. They don’t care about making you wealthy. They only care about keeping your eyes distracted from real work and getting you to watch the commercials when they come on. For some, they will never wake up. But for others (the rare) they will. Those that wake up know the truth and that truth is that the only thing consistent is that nothing is consistent. Never get complacent and realize that while trends last longer than most things anything and everything can and WILL happen. This thought process is the difference between luck and real success; the difference between a part-time trader and someone that has been doing this full-time for 14 years (I know it isn’t long but I guarantee I put in more quality hours than most who put in 8 hour workdays).
I am in caution mode here and I will be looking to get short those past big leaders (some of them we were just long: KONG RINO blah blah blah) when they finally do give me a clear short signal.
Aloha from O’ahu.
