Our remaining 2 positions have 52.5% in gains as we look at the current conditions in the market.

The questions I face each weekend are 1) do we need to close any of our current positions?  And 2) is it time to open any new positions?

Our current 2 open positions are well above their stop levels.  So there was no need to provide guidance on Friday to act near the close.  These levels change each week.  Here are the current charts:

As for the current market conditions, the barometer has entered sell mode, which is a sell signal for the market.  And as a general rule, when the market is selling off, 3 out of 4 stocks will follow the general market lower.  This means that you can sit back and watch the market during this period or you can try to trade, but stock picking will become a bit more difficult. 

On the other hand, you can take the market timing component out of the picture by making trades on a fixed period basis - i.e. like every Monday.  This takes a ’decision’ out of the process and prevents you from getting out of sync with the market.  Out of sync means not only that you could be buying when the market is selling off, but that you may be avoiding buying just at the right time to buy.

Taking ’decisions’ out of trading mean less opportunity to be wrong.  For example, in our market timing service, when we issue a sell signal, we move from long to short - as opposed to closing our long position and then waiting for a signal to go short.  So each trade requires only 1 decision, as opposed to the standard way of trading, which requires 2 decisions.  Remember, each decision point is a place you may not only be right, but you have the possibility of being wrong.

And finally, I’ve run our scan on the current market conditions for picks and the scan was obviously on the light end, which is indicative of the current market conditions.  I’ll do some more work to see if any of these should be recommendations for Monday.  The issue here is leadership and as the scan begins to produce more potential picks, we’ll begin to see leadership emerge and new opportunities for profit potential.

On a side note, here’s a short video clip from a Stock Trading 101 class I did in 2006.  I would suggest that you right-click on the link and save it to your computer before playing it.  We’ll be posting more of these in the coming weeks and months and just want to test the impact on our systems of providing these videos.  Let me know what you think.

Regards,

Jay DeVincentis