Saturday, February 20, 2010

Market Strategy Update: Stop Playing

We have reached a critical stage. The traders refer to this as a "Pull the Cord" or "Eject" stage. This does not apply to long-term investors-only short-term players. This is a fairly rare occurrence when the markets are in a state of "flux". This means that there is no trend yet established. The players are trying to decide what type of market we will be prevalent for a profitable environment. When it becomes a "50-50 Gamble"- it is better to close all positions, go to cash, and reset. It has become too risky to go long or short-as the damage could be substantial either way. A Pro plays with an edge and right now there is no legitimate edge for either camp. This is when you "stop playing"-you "eject from the game"-You "pull the cord". The risk/reward ratio is pure gambling now. We choose not to play. Let the markets reset and clear the boards. Call it a "time-out" or "break". Enjoy the time off......speak soon.