I have not posted for awhile. Had a nasty winter virus and had to lay low for awhile. Just been watching the markets for the last few days and it has been interesting. My favorite market to trade is the S&P, usually the current E-Mini futures contract. The past week or so has been very interesting – and a bit strange as well.

My trading method is based on technical analysis, but I try to keep up with the primary fundamentals that drive the markets I trade. Generally, the stock market goes up when the economy is doing well, if not increasing. The current market is strange because the economic reports are coming in weak and the market continues to advance. I must confess that makes me wary that the market is getting ahead of itself. A sell off right now would be healthy – provided it was not too severe. A few market observers are beginning to think that a bubble is building in the market and that when it bursts there will be a very severe sell off.

I do not know what the market is going to do. I do agree that it is going up for little apparent reason, and that makes me think that a sell off is in the cards. I wish I knew when that would happen, but the market can remain irrational for extended periods of time.

What I try to do is trade long with greater caution and prefer taking a short position whenever the technical picture looks favorable. I will take a short that is weaker than I might like in these markets – hoping to be on that side of a trade when the sell off starts.

Be careful out there. We live in interesting times – and they often can be dangerous times as well.

 

Leave a Reply

Your email address will not be published. Required fields are marked *

Comments Protected by WP-SpamShield Spam Blocker

See the Music of the Market

The unique trading method that is Trading Between the Lines