Trading is an engaging business, no doubt about it. Ya gotz to pay attention. If you don’t, if you lose focus for just one moment, one tiny moment lasting no more than 30 seconds, or if you are lackadaisical, casual, or otherwise just slow about executing a trade, you might find yourself staring at the monitor with a quizzical look, one that suggests you are thinking, “What just happened?” Just about ten minutes ago, I found myself staring at my monitor thinking, “What just happened?”
I was watching one of my fuel-cell trades (BLDP) going up, so I decided to put in a trailing stop. I figured it was going to pop on some news, as that is what these stocks do. As I was putting in the trade, I mean literally typing in data, the stock jumped some 7%. My issue is that the sudden move triggered my upside sell (I always have one in place for just such a move.), which, by the dang way, would have been cancelled with my new trailing stop order. BLDP has since climbed another 8% or so past my sell point.
Now, what I should have done is cancel the upside sell BEFORE I put in the trailing stop. Instead, I thought I had time. Actually, I didn’t think at all. I just decided and casually did. Lesson learned – never leave an upside sell in place when replacing an order.
The big news this week is the employment data coming out on Friday. If it correlates with the ADP report that came out today, we should see some good news on the jobs front and the market will like that mucho. It might even decide to make some new higher highs, which will make the bear clan crazy. “The market has no business floating about these heights!” they will scream. “It will fall! It will fall fast and far,” they will bellow with their strident voices.
- The ISM (Institute of Supply Management) Manufacturing index shows that growth in the manufacturing sector of the U.S. economy continued to expand in March for the 10th consecutive month. The all-important index, which is a proxy for the state of the manufacturing sector, was reported at 53.7. The reading was just below the consensus estimate for a reading of 54.0 but above last month’s reading of 53.2.
The above, as well as a number of other data points that have come out recently and the technical reality of a market going higher are a problem for the bears’ argument.
- The S&P 500 hit a high of 1885.84 today [yesterday], and closed just a tad below there, at 1885.52. That’s above our big line in the sand at 1884, and has put some new pressure on the upper Bollinger band. Volume wasn’t too weak either. In fact, I’d say the volume behind today’s [yesterday’s] rally was pretty solid.
To emphasize this point, I will pick on Bill Gross, one of the marquee names in the market-analysis business. Here is an excerpt from an article about one of his analyses in July of 2012.
- “The cult of equity is dying,” he writes. “Like a once bright green aspen turning to subtle shades of yellow then red in the Colorado fall, investors’ impressions of ‘stocks for the long run’ or any run have mellowed as well.” Gross is the latest high-profile industry name to pronounce the stock market moribund if not completely dead.
We all know what the market has done since July 2012, but how has the Pimco Fund performed since then, you know, the one Bill Gross manages?
- Investors pulled another $3.1 billion from Pimco’s flagship fund in March, the 11th straight month of outflows from the world’s largest bond fund, and its performance on the month lagged 95 percent of its peers due to a spate of wrong calls by long-time manager Bill Gross.
The important thing to remember is that those who predict with certainty are just guessing and those who predict with righteousness have an agenda or are, simply, “true believers” in themselves.
The trick is to track the reality of the economic data, to stay abreast of the geopolitical news, and, most importantly, to stay connected with the market, which means watching it day in and day out to find its rhythm, to find its pulse, so to speak. One of my favorite market watchers, David Moenning, sums this up succinctly.
- Remember, the trick to this game is about staying in tune with what the market IS doing – not trying to predict what it will do next.
Now is the time to make money, so go do it!
Trade in the day; Invest in your life …
