Will January set the course for 2014?

Now that we are in December you will start to hear the phrase “January Effect.” You will even see education firms sell a one-day seminar on how to play the “January Effect.” I would recommend saving your money.

“As goes January, so goes the year” is layman’s term for the “January Effect.” No one knows how things will play out; we can only speculate as to how things could play out. The old adage, “trend is your friend,” will be the best investment advice that could be given. I have coached countless traders who love trying to catch a bottom in a stock that is in a major downtrend.

Stick with the overriding current of the direction of the stock and you will do very well in 2014. I have already read several talking heads predicating a major crash in 2014; however, it is the same thing they have been predicting year after year. I will leave all market prediction to those talking heads.

Present market conditions are a bull market so stick with the prevailing trend. Also, note that there are individual equities in downtrends that are shortable. Again, stick with the trend of the higher time frame which will pay you in leaps and bounds and make 2014 the best trading year you have had.

Here are some examples of some big movers in 2013. Each one more than doubled in their move.

  • JCP $20.00 to $8.00 Downtrend
  • BBRY $12.00 to $6.00 Downtrend
  • CELG $80.00 to $170.00 Uptrend
  • YHOO $20.00 to $40.00 Uptrend

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Take our #Fed poll here. Do you expect a taper today? How will you be trading the Fed meeting?