Anybody can make money in a bull market. The test of a good investor is ..

Anybody can make money in a bull market. The test of a good investor is how you perform during a correction and a bear market. It is not what you make but what you keep that is important !

It has been pretty easy to make money in the stock market over the past 7 or 8 months if you had the guts to entered a buy order this past spring. That is assuming you still had cash and were not getting ready to jump off a tall building. After witnessing the ugliest 7 or 8 months in the stock market previous to this spring, it took lost of 'guts' to hit the 'buy' switch.
You could have been the most savy investor in 2008 and you would have still lost alot of money in the subprime meltdown and market crash that followed. Everyone was selling and running for cover. Cash was the one asset that saved investors. There where a number of 'head fakes' to get investors to put the cash to work in 2008 but at the end it was a blood bath and not many investors made off with profits (except the hedge fund guys that shorted the subprime and stock market).
2009 has been a different story, basically straight up since late March (up 20% YTD after being down 30% Jan to Mar, a 50% swing). That is after a 43% peak to tough drop in 2008.  The DJIA looks like a "V".
Now the $1,000,000 question ... what is the market going to do now ???  Do you sell and go to cash or stay invested because the market is climbing the wall of worry.

trading volume

There are many questions out there about what is really driving the seven-month gain and how sustainable it really is. One of the big ones that keeps popping up is trading volume. Where is it?


The recent ups and downs have generally been defined by low volume on the up and higher volume on the down.



Gains have been exaggerated by light volume, Gluskin Sheff + Associates’ strategic guru David Rosenberg comments in his note Tuesday morning.



“Barely over a billion shares on the Big Board? Are you kidding? After a 16.6% plunge on Friday, volume in yesterday’s session was still far below normal and the second lowest in the past two weeks,” he says. “This is a sign that conviction over the current rally remains unusually light.”



It’s a good question and the bulls haven’t offered a convincing answer. Trading was light Tuesday morning, with U.S. markets giving back early gains and the Toronto Stock Exchange down 86 points to 11400, led by the energy sector.

S&P 500, a pause

The weak dollar was cited as reason for yesterday's rally, but there is more to it than that simple explanation. Slack  economic activity has prompted the Fed to keep short term rates low, and the money supply ample in hopes of causing increased economic activity. The cheap rates also provide funding for the carry trade. With the carry trade, speculators and entrepreneurs alike have funding to invest in the assets they choose. Recovery will take a very long time if we tax and regulate the job creating entrepreneurs.




So far today the stock market has paused. In the US the IBD/TIPP Economic Optimism report came in at less than expectations, 47.9 versus 53.1, and 52.5 in the previous period.

Head And Shoulders Pattern ????

What Does Head And Shoulders Pattern Mean?

A technical analysis term used to describe a chart formation in which a stock's price:



1. Rises to a peak and subsequently declines.

2. Then, the price rises above the former peak and again declines.

3. And finally, rises again, but not to the second peak, and declines once more.



The first and third peaks are shoulders, and the second peak forms the head.

S&P 500, breakdown from the ascending wedge pattern

Technically speaking, we do not yet have a down trend -- we need a lower high and a lower low.

Going against one of Gartman's Rules and I am averaging down.

One of Gartman's Rules is to never average down.
BUT I am averaging down. To be successful you must believe in your analysis and have conviction. There is no 'hold', a position is either a buy or a sell. I also do not believe the saying "Portfolio returns are based on time in the market not market timing". I believe it is good analyis, market timing and a lot of luck. I rather be lucky than smart with regards to the market.

Buying another unit of SKF‎ - ProShares UltraShort Financials (previous purchase $40.47 and today's purchase $26.75 = $30.61 Average)

Buying 1 unit of DXD‎ - ProShares UltraShort Dow30 to average my short Dow 30 (note DXD is 2 time levered and DOG is just the inverse of the Dow's daily move)