A Few Market Thoughts…
1) My feeling is that trading this market over the next 3-6 weeks will be a total waste of time.
2) Stocks are forming bases right now, but they need more time to set up properly. PATIENCE is so important right now!
3) I wouldn't be surprised to see the market chop around through July. By chop, I mean 1 day up and 2 days down, followed by 2 days up and 1 day down. Again, nothing "sustainable" to the upside.
4) If you insist on trading, keep position sizes small and take quick profits. If you are not comfortable trading that way, then don't trade.
5) The key in corrective markets is not to make money, but to protect your capital. As Paul Tudor Jones says: "Play great defense, not great offense."
6) I don't think we will have another big leg down, but I'm not ruling it out either. (How's that for hedging myself?)
7) Keep in mind that cash is a position and there is nothing wrong with doing nothing.
8) I do like how many leaders found support near their 20-day moving averages on Wednesday. Examples include: $BIDU $DECK $CRM $APKT $NFLX $AKAM $CMG. Unfortunately, everyone is watching the same 10-15 stocks and this could be a crowded trade. I like these names but I would prefer to see MORE stocks setup.
9) "Wait until as many factors as possible are in your favor before making a trade. It's the patience that makes the money." --- Jesse Livermore
Please tune into my show "The Next Big Move" this Sunday night at 8PM EST on StockTwitsTV (http://www.stocktwits.tv/). I will be discussing these thoughts in more detail and comparing the current market to a possible 1997 scenario.
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