How are we doing?
When I have to view the market from 4,000 miles away I find the good old Big Chart to be a particularly useful way to check the vitals:
|
|
|
Day’s |
Must |
Comfort |
Break |
Next |
|
Index |
Current |
Move |
Hold |
Zone |
Out |
Goal |
|
13,463 |
35 |
13,000 |
13,300 |
13,500 |
14,000 |
|
|
2,891 |
57 |
2,800 |
2,900 |
3,000 |
3,250 |
|
|
1,476 |
9 |
1,470 |
1,505 |
1,530 |
1,550 |
|
|
9,606 |
52 |
9,400 |
9,800 |
10,000 |
10,250 |
|
|
2,561 |
14 |
2,525 |
2,550 |
2,600 |
2,750 |
|
|
493 |
-1 |
480 |
490 |
500 |
560 |
|
|
774 |
7 |
810 |
830 |
850 |
900 |
|
|
22,394 |
486 |
20,250 |
20,750 |
21,000 |
22,000 |
|
|
17,029 |
107 |
17,400 |
17,700 |
18,300 |
18,500 |
|
|
15,264 |
331 |
13,500 |
14,100 |
14,725 |
15,000 |
|
|
7,557 |
43 |
7,300 |
7,600 |
8,000 |
8,200 |
|
|
5,620 |
0 |
5,750 |
6,000 |
6,100 |
6,300 |
|
|
6,349 |
40 |
6,400 |
6,550 |
6,600 |
7,000 |
It’s a little earlier than usual so perhaps someone can edit this later as Europe isn’t even open yet (BBD wondered how I find time while on vaca but you’d be amazed at how much time one has if you only sleep 4 hrs a night!). Today is a big travel day though so I will leave you with these thoughts:
- Dow – Up just 41 points (from the weekend chart)
- …and we are excited about WHAT exactly???
- The NYSE actually lost a few points
- AND the Nasdaq
- AND the SOX
- The Russel is 36 points BELOW crisis levels
- Hang Seng is still down 50 points after gaining 486
- Nikkei gained a few but still redder than red
- India is breaking out, if it sticks and the Nikkei follows there is hope!
- DAX barely even
- CAC still way off and way red
- FTSE still way red
On the whole, I think I picked an excellent time to go on vacation! I’ve missed three days and, on balance, NOTHING happened except a bunch of people rushing in and out of positions – great for day traders, not for investors!
If you fancy yourself an investor, a chart like this is invaluable, as it can serve to remind you how little a 400 point gain or loss can be in the grand scheme of things. Don’t let a day’s move in the market’s guide your "invesments." If you think you see a bargain, go for length – you may not make a killing by establishing an ’09 but you will certainly avoid being killed by the whipsaw moves.
In a choppy market, if you can’t be satisfied with taking a (using an example from a comment I just made) 5% one-month profit on a SBUX Jan ’09 $30 then you need to look deep inside yourself and realize that you are not an investor, you are a gambler who can’t live with 60% returns while some of the best fund managers on the planet are losing their shirts.
Rule #4 (trial run) – Remember WHY you entered a position. That means have a goal AND a plan for reaching that goal. Recognize whether that plan is on or off track and realize there is no shame in taking a small loss and reassessing the situation in a crazy market like this.
If you LOVE WFR at this price then why wouldn’t you love 5 ’09 $60s for $14.60 rather than 20 Sept $60s for $3.20? You have 15 more months to make gains, you can hedge all or part by selling closer calls and a $5 dip from here will only take about 20% of your position, vs 50% on the Septembers. After the last 2 weeks I think few of us have the ego to think that we know what’s going to happen after lunch – yet alone after 6 weeks!
Big travel day for me so please, please, please – be careful out there!
– Phil
