Wednesday, November 10, 2010

"Well, you know this is a bull market!"

"I think it was a long step forward in my trading education
when I realized at last that when old Mr. Partridge kept on
telling the other customers, "Well, you know this is a bull
market!" he really meant to tell them that the big money was not
in the individual fluctuations but in the main movements that
is, not in reading the tape but in sizing up the entire market
and its trend."


I am not sure when this will end, but I will only bet along the line of least resistance.  That is the single most important idea one can learn in any type of investment.

On another note, I don't like to gamble instead I speculate.  However I place a bet today after hours against what I perceived the Nasdaq over reacting to Cisco negative earnings.  I know it sounds complex but I shorted the ultra short Nasdaq etf SQQQ, in essence betting long.  Why did I do this?

Often times when terrible news comes out after hours trading gets a little nutty, I decided to fade the move.  Pretty low risk trade considering the SQQQ was up 4.5% afterhours, I figure I can get back at least 1.5% within the first half hour of trading tomorrow.  I have done it before and the reason behind it is afterhours trading is often illiquid for large institutions to play in and when they move they move far harder than they would in normal hours. 

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