Market View 2 August 2010

Just a small recap from last Friday's US market:

"U.S. stocks closed little changed on Friday, but
Wall Street wrapped up its best month in a year
after the earnings season rounded the final turn
with a group of strong results that offset the impact
of poor economic data." Dow down 1.22 points,
S&P 500 added 0.05 points and Nasdaq up 3 points.

Today is the first trading day of August and some
readers asked me last week whether they can expect
to see a pre-National Day rally this week.
I am quite indifferent to such a view as I believe that
even if there is one, the upside is likely capped.
My concern is how will the market react after the
jovial National Day celebration? Mr Market has a
"bad" habit of dishing out "surprises" pre and post
public holiday trading, and I think this time it may be
a negative surprise.

Last Friday, I stated in my blog that I am selling and
clearing out most of my contra trades except for those
positions deep in the money and I am glad that I
did so as most stocks turn weaker as the trading
day goes on.

Some readers told me that they have "strange" occurances
that while the market and the Hot stocks are moving up
strongly, the stocks that they hold or bought seems to be
stagnant or move slightly and they have profited from the surge.
It is down to stock selection again, and I asked what are
the stocks that they have. And to no surprise at all, they
are either those loss-making micro-pennies or no-low volume
stocks, thus that explain the "strange" occurrence is really
not "strange" at all.

Yes, you can make 100-500% from the
micro-pennies stocks if they are being push-up and in the
limelight, but what if it is not selected at all?
I prefer to look at those stocks that I know is liquid, volatile
and still have reasonable upside potential, and last but not
least, I know them well. The last factor is major, but I guess
it will only comes with year of experiences sparring with Mr Market.
 
I will be cautious today and this week and will only
trade those counter in my close-watch and with liqudity.

Enter any position with a Cut-loss level & Trailing Stop,
and Please practice strict (Risk)Money-management.
If you don't like what you see in the market,
simply don't trade.

If you have Skype, and would like to chat with me about
stocks and all others, you can ring me at my
email address: stocklobang@yahoo.com
I have currently a couple of members skyping with me
everyday,and they are having good trading results.

As usual,
Stay Alert but be Aggressive too.
Audentes Fortuna Juvat !!

市场生存座右铭: 风林火山