NO CHANGE

No change in my words of caution I made yesterday. I still think the probabilities here are that we will either retrace a bit or move sideways for the next few days...or possibly a week or two. This doesn't mean that we have to stop trading. We just need to adjust our strategies and capital allocations (risk). For those that have attended our Advanced Option Strategies course, this is a good environment to implement some of those strategies...particularly the spreads. For those...like myself... that prefer directional trading (buying calls or puts), you might want to shorten up your trading time frame. I will look for shorter term patterns using a 60 minute chart. I will also prefer to stay in trades for only 1-3 days (approximately). The reason why this strategy would work better is that you might get a market that is up 100 points one day and down 100 points the next. Since 80% to 90% of stocks follow the major market averages, you often get a decrease in trending stocks when the market moves sideways. Let me be clear...I don't know if the market will move sideways or not in the upcoming days or weeks...but we won't know we are moving sideways until we have been moving sideways for a while. I hope that makes sense. Since we don't know the future, we can adjust our strategies in anticipation of future movements. If we are wrong in this assessment, it will be more of an opportunity cost (we'll just make less money). To protect from the possibility of a strong sell off, make sure you...1. Have stops...and... 2. Keep those stops pretty tight. I would also suggest trading stronger companies. If you use the Market Trend Signal website (www.orbisadvisors.com), scan for stocks with a Strength Rank of 80 or higher...especially if the short term trend is up and they are registering a buy signal. These stronger stocks have been moving up nicely despite any pullbacks in the market. For those that want to use a free trial, go to www.orbisadvisors.com and sign up. For those that are already using the trial, you have probably already discovered that you can easily pay for your monthly subscription with the trade recommendations offered on the site...or the ones that you find using the scans and trend signal software. I will try to post an update later tonight with results of some past recommendations as well as some current patterns I like.