This is a very interesting week. It's kinda an in between week. We're not close enough to the end of the year for Window Dressing, or technically January Effect, but based on last week's action we SHOULD go up, potentially dramatically. Sellers look about spent and the market is reacting to every piece of bad news as though its meaningless. Shorts have to be frustrated at this point. There is, however, the flip side which is that reality is anyone buying here for more than a trade is going to lose their money in a big way, AND Friday's move up made a lot of sense since a gap down on a Friday of that magnitude means every short who has a brain covers. That's what the general media and guys on shows that shout military terms fail to get, good traders cover positions at extremely profits and the market goes higher. That doesn't mean that they lost money or are running scared or anything of the kind. To the contrary, it means that they were smart and covered without worrying about leaving some on the table. Capesh?
Here's another thing, I keep hearing that the notion is that if GS gaps down post earnings you should just buy. In fact, I heard one guy who seems like a horrible trader to me, that you should buy with "both fists". Maybe, maybe not, but I think that's kinda a dumb call to be that strong. Not necessarily a poor idea, in fact it may rally post earnings, but I don't think it's a no brainer. Yes, normally that's the trade I'd take, a buy the news situation, but GS may turn out to be a bit different. WE may buy GS post earnings, but let's see what shakes out, you all know long term I think GS sees under $25 and more like under $10. I think GS is worth ZERO, basically. I'm long here, I think you have to lean long until proven wrong here. Having said that, I am just very leery, it almost seems too easy based on every trend I know. That's what scares me, but then again this market has been pretty dead on easy for a while, and things that make sense are really working well (like Friday's gap fade). So, let's just go with it and ride the wave and see what shakes out. I lean long and I am long, but my stops, trust me, are set and I'll reverse if required, I think the stars are aligned, though, for us to get a bust out over 8500 and we should see 9000s this week if thats the case. We shall see soon enough, stay tuned!
Also, I want to mention, many of you guys have made money for nothing or as a member and read my blog all the time. If you have made any money, or get something out of it, I'd like you to consider donating some money to my 501C-3 TREND FUND FOUNDATION. I know people are struggling so give what you can, but it's a worthwhile organization and we are working on starting a program to give scholarships to kids who can't otherwise afford college but would like to go. Those of you who have been here a while know I've done a lot of charity work, mostly with kids. I plan on continuing that trend in 2009 and need some help, anything you can give would be great! Please make checks payable to THE TREND FUND FOUNDATION and send them to;
19 Charlton Hill
Hamden, CT 06518
Yes, all donations ARE tax deductible. I fund all expenses for the charity, so 100% of your donation go toward the actual causes. I'm a huge believer that everything you give, you get back spiritually at least 12 X's that amount. So, be selfish and give a lot! :)