Bleeding Continues

Posted on May 7 2015 - 7:01am by Sharpe Trade

This week has proven interesting.

Nothing has changed from overnight.  We have the entire bond curve rising higher, as bonds fall.  Oh … and Gold has started to pick up downside momentum as well.

Stocks are down another 14 points this morning.

Think about that.  I’m just going to leave that there for now.

I’ve gone to cash.

I’ll be watching the 10:20 turn with interest …

4 Comments so far. Feel free to join this conversation.

  1. MrAgronomist May 7, 2015 at 11:05 am - Reply

    Is there something brewing in the markets?

  2. Brian May 7, 2015 at 6:31 pm - Reply

    Maybe. I had that feeling since stocks were whipping up and down in January. It didn’t feel right to me. Coincidentally, Dan also felt something about the market was off.

    U.S. stocks have mostly been ranging year to date. Certainly, there were rallies and gap ups in individual companies (biotech comes to my mind), but individual stocks aside, it’s been difficult to identify and ride trends at least with the indices. Every time something looks directional, it seems to reverse soon afterwards.

    The name of the game has been to buy weakness and sell strength, but the increased volatility makes it harder to get good signals and manage decent reward:risk.

    Dan also mentioned that we may see something similar to 2014, where stocks didn’t go much anywhere the first half of the year, but pushed higher in the second half. I’m inclined to agree because the broad trend is still up, but I’m also playing it safer for now. I doubt we’ll return to the “Ebola lows (credit to Kenny Glick for this name lol),” but I think a pullback of, say, 5% would be ok. Maybe to test the 200-day SMA or EMA.

    Stocks have been tricky, but what would Mr. Partridge say? Would it still be “You know, it’s a bull market!”?

  3. Brian May 8, 2015 at 9:55 am - Reply

    Oh, look at that. U.S. stocks are up. Mr. Market is jumping for joy.

    Folks, if you’re already long, enjoy your gain. Otherwise, don’t chase momentum. Either way, manage your risk and protect what you have. Stick with what works for you and don’t freak out if things don’t go your way immediately.

  4. Dan Shy May 8, 2015 at 11:10 am - Reply

    Well said … I’d hit “like” on the comment if I could

    Momentum is what I have my eye’s on …

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