Congrats to the Pittsburg Steelers for having played a great game and being the world champions. One of the great side stories to the game was that last year rookie quaterback Ben Roethlisberger made a promise to vertran running back Jerome Bettis: He would get him into the Super Bowl in his home town of Detroit of "The Bus" would stay in Pittsburg and play for one more year. It was a long, hard road and it did not always look like Ben was going to be able to keep his promise, but in the end Bettis got to play the last game of his career in the SuperBowl at Ford Field, a dream come true for him.
So what does this have to do with trading stocks? A lot actually. When I first read Ari Kiev's excellent book "Trading To Win" one of the key aspects he talks about is a making a promise. He suggests that traders should make a promise to someone that they will be successful as traders, to be specific and promise something great. It is a scary void to put yourself in, because no one wants to break a promise and achieving it is not something that is by any means easy. However, an amazing thing happens when you make a promise. It is a strong commitment and you will move heaven and earth to live up to it. For myself making a promise to my Grandmother about my trading turned out to be a key turning point in my career, and since making that promise I have been successful beyond what I ever dreamed I would do. So take the leap, live in the void and see what happens: You will be thrilled with the end result.
Now we move on to the market. The US Equity markets had a lot of information to take in this week, not all of which was seen as good. The key thing that happened was the Federal Reserve Policy meeting on Tuesday. Doctor Bernanke and the Fed raised rates another quarter point, which is not newsworthy, however they did not take further rate hikes off the table, and that is. The market has priced in as fact that the Fed would be done raising rates after this meeting or the next one. Unfortunatly though the Fed still sees inflation and has said that they are prepaired to fight it with continued rate hikes and are willing to continue their long tradition of going too far for too long. Equities have sold off sharply on stronger volume than we would like to see since. This is a sign that Wall Street was caught off gaurd and is now pricing in further increases.
At the start of the year I came out very bullish, that has for the time being changed though and I am not more neutral. I have a heavy cash position and a wait and see approach to the market. January was a great month, my own accounts scored gains in excess of 10% for the month. The most important thing to having long term success in the market is not only in producing above average gains, but holding onto your gains. There are times when "all the stars align" and you and profits can be pulled out with relative ease. Other times though the market gets a lot trickier and it is not easy by any means to score a profit. During these times the prudent course of action is to stand aside and let things sort out. Unfortunatly most traders feel the itch to always be in the market, so they churn and give back hard earned profits during these times. I think that one of the things I am best at though as a trader and money manager is holding onto the gains I have. I am fairly conservative and rarely hit the ball out of the park, but I am very good at holding onto the gains I have produced.
Currently there are few stocks that are standing out to me as worthy of capital commitment. One the long side PACR has pulled back nicely after a breakout from a nice monthly base and may be worth putting some money to work in. Starbux (SBUX) also stands out as one with potential to move higher. One the short side some of the Dow Industreals look nice, for example MMM, and INTC (Both of which I have open positions in). I also feel that IBM is worth consideration given the weak chart pattern and suspect earnings report they came out with two weeks ago. Aside from that now is not the time to be really busy buying and selling stocks. Use this time to research, make your lists, review your journals and things like that.
Brandon
So what does this have to do with trading stocks? A lot actually. When I first read Ari Kiev's excellent book "Trading To Win" one of the key aspects he talks about is a making a promise. He suggests that traders should make a promise to someone that they will be successful as traders, to be specific and promise something great. It is a scary void to put yourself in, because no one wants to break a promise and achieving it is not something that is by any means easy. However, an amazing thing happens when you make a promise. It is a strong commitment and you will move heaven and earth to live up to it. For myself making a promise to my Grandmother about my trading turned out to be a key turning point in my career, and since making that promise I have been successful beyond what I ever dreamed I would do. So take the leap, live in the void and see what happens: You will be thrilled with the end result.
Now we move on to the market. The US Equity markets had a lot of information to take in this week, not all of which was seen as good. The key thing that happened was the Federal Reserve Policy meeting on Tuesday. Doctor Bernanke and the Fed raised rates another quarter point, which is not newsworthy, however they did not take further rate hikes off the table, and that is. The market has priced in as fact that the Fed would be done raising rates after this meeting or the next one. Unfortunatly though the Fed still sees inflation and has said that they are prepaired to fight it with continued rate hikes and are willing to continue their long tradition of going too far for too long. Equities have sold off sharply on stronger volume than we would like to see since. This is a sign that Wall Street was caught off gaurd and is now pricing in further increases.
At the start of the year I came out very bullish, that has for the time being changed though and I am not more neutral. I have a heavy cash position and a wait and see approach to the market. January was a great month, my own accounts scored gains in excess of 10% for the month. The most important thing to having long term success in the market is not only in producing above average gains, but holding onto your gains. There are times when "all the stars align" and you and profits can be pulled out with relative ease. Other times though the market gets a lot trickier and it is not easy by any means to score a profit. During these times the prudent course of action is to stand aside and let things sort out. Unfortunatly most traders feel the itch to always be in the market, so they churn and give back hard earned profits during these times. I think that one of the things I am best at though as a trader and money manager is holding onto the gains I have. I am fairly conservative and rarely hit the ball out of the park, but I am very good at holding onto the gains I have produced.
Currently there are few stocks that are standing out to me as worthy of capital commitment. One the long side PACR has pulled back nicely after a breakout from a nice monthly base and may be worth putting some money to work in. Starbux (SBUX) also stands out as one with potential to move higher. One the short side some of the Dow Industreals look nice, for example MMM, and INTC (Both of which I have open positions in). I also feel that IBM is worth consideration given the weak chart pattern and suspect earnings report they came out with two weeks ago. Aside from that now is not the time to be really busy buying and selling stocks. Use this time to research, make your lists, review your journals and things like that.
Brandon
