Economy and MarketsWHAT NOW?

Shit! I've been stopped out. What do I do now? I can only tell you what I do. I saw the potential for a top last weekend. I saw my stocks tumble during the week and I set stops at the 50 day moving averages. I only own three and was stopped out of two. What now? Do I buy back in to the same stocks? Put my money in a "safe" place? What?

First, I never go long in a bear market. Never. We had huge sell offs on rising volume, but only for four days. There is no confirmation of a bear. This could be just a minor "correction". But the Friday rally was on weak volume. So?

I don't re-buy the same stock unless it is coming off a second or third "basing" formation. I am looking for other stocks to give me a buy signal. I have lots more money now than I did six months ago; one stock was up 100% and the other 325% (remember I lose three out of four times, meaning I get stopped out of my initial buys with an 8% loss).

I wait. I want a bull market. Rising prices on rising volume. Insiders have been bailing out for months. Did they buy back in on Friday? I don't know. What was the rally about? I don't know, and I mean KNOW, not what do I think.

Back to basics. Remember, being out of the market IS taking a position in the market. I'm an investor not a speculator. JOBS is what the economy and the market must have. Right now there are no NEW HIRES. All these "great" numbers coming out right now must factor in the 40,000 supermarket strikers in SoCal going BACK to work and the God knows how many construction workers who couldn't work because of the weather also going back to work. Stay cool. I won't move til I'm off vacation no matter what. And I don't move into a market I don't understand. Right now, I don't understand.

That's what I do. I'm a student and a follower of William O'Neil at Investors Business Daily. The guy is never wrong.

BTW my gold buy at 380 stop is still on. I may cancel it. Dollar has turned near term and gold is headed down. I WILL keep you posted on that old recommendation. LINK to a very old post to show you how long it takes for a long trend to truly bottom. It is my opinion that the dollar will rally for the next few months at least.

Not a solicitation to buy or sell stocks. All stock investment involves risk of loss of all your money. Do not invest more than you can afford to lose. Stop loss orders may not be filled at your price. Buy stop orders may not be filled at your price. Spreads can be more risky than outright long or short positions. Buying on margin or trading the futures market can result in losing more money than you have put up and shouldf never be undertaken by people without the capital to sustain huge losses.