We all knew that a market collapse was not going to immediately follow the Fed meeting today. At least if you’ve been reading this blog for any length of time you’d know I’ve been very bullish for awhile now (click that link if you need reminded why). My move to the sidelines yesterday was merely a preventative action as I didn’t feel the risk/reward was worth having exposure in such a volatile state. Not to say we’re out of the woods yet, but things from my vantage point are starting to clear up.
It’s a shame too because my stocks that I sold yesterday performed well today. The problem with trading in this news-driven market is I’m not so sure I would have been able to prevent myself from getting shaken out of my positions in the moments after the Fed released their cryptic news. I’m just as susceptible as anyone when the ticker starts to go all over the place when real money is on the line. The only real way to keep your mind clear is to avoid
#1. The Transportation Index broke out of it’s c/handle today with volume. This is a great sign for the economy despite all the negativity out there regarding growth. If these stocks are moving higher than investors perceive that products are moving from one place to the other.
#2. The Vix deflated today. I noticed it had risen for 6 straight days and that is rather abnormal, I just didn’t expect it to fall nearly 10% on today’s news.
#3. This is a personal indicator, but when I see new stocks in high numbers continue to show up on my scans each night it’s a sign of a healthy market. Tonight I added to my main watchlist the following, but other stocks continue to act bullish:
CSTR TRMB WTI UEC F BZ
Now I’m not about to go head over foot into these stocks tomorrow, but I will start buying stocks long as they hit my targets, provided we don’t have some sort of market collapse tomorrow. Ideally I’ll be able to slowly add stocks back to my portfolio as the market continues to relieve overbought conditions by moving up/down in the current channel. Which we are at the top of on the Nasdaq and it wouldn’t surprise me to see us have a massive breakout.
#4. My proprietary timing system remains wildly bullish and had a move that almost always implies more upside…
