Business Magazine

Mid-Day Update

Posted on the 29 November 2011 by Phil's Stock World @philstockworld

Courtesy of David of All About Trends

So now what? As far as the indexes are concerned and given that the Full Stoh’s on the 60 minute charts are in nosebleed territory we’ll need to work that overbought condition off. We’ve talked numerous times in the past about how the markets do that — Sideways or Pullsback (think backtests). 

So what about those gaps?   Well for one thing by now we should all be getting used to them and how to handle them.  It’s extremely frustrating, we understand that. However that is just the way the market is. We’ve talked numerous times throughout the year about traits that top traders have and one of those traits is that of being able to be successful regardless of what the market throws at you.  Like we’ve said, if you can successfully navigate the rapids of this market this year in the end you’ll truly find out what you are made of and ultimately be able to handle anything the market throws at you. That’s the positive in all of this from an individual’s perspective.  So what about them? For us there are two ways to play them and the main way is exactly the way we have and that is buying in the face of fear on pullbacks in technically oversold markets and then? Sweating it out while being in what we call "The Zone".  Sure we tend to go under water a bit at times but we know better than to trade from the hot money perspective of "I want my instant gratification".  That’s a fast money, hot money losers stance.  See the folks who chased Paulson’s hedge fund performance over the past year? This guy is down huge this year.  But he’s a star right?  Give us a break, it’s always the same.  Those who chase buses via stocks, funds or managers always end up with the same result — wishing they hadn’t.  This isn’t the 90′s anymore. In the 90′s secular multi-year bull market cycle if you screwed up it was no biggy as the market bailed you out if you just sat through the corrections. That’s not the case anymore as the indexes haven’t gone anywhere in years. So that’s one way, buy the dips when it looks ugly out there. But what if you see

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