Indeed the morning is really good after a great night of stock rally. Strong earnings from a couple of industry bellwethers and a weaker U.S. dollar brought about a concerted buying effort that sent all three major indices to new 2009 highs. With 74% advances versus 24% declines for NYSE and 72% advances versus 24% declines for NASDAQ, DJIA was able to settle above 10,000 for the first time this year.
All my stocks made money with the exception of Forest Lab (-0.24%). OSG had closed a whopping 5.05% higher at $43.71 and BHI 2.62% higher at $46.21. The stock I recommended this week, CAH, closed 1.37% higher at $27.31. So I am a really happy man as my stock portfolio returned more than 30% for the quarter.
Will the stock market continue to rally? I remembered reading an article from Financial Times a few days ago and the article reported that both the head of Tesco – one of the world’s biggest retailers – pronounced firmly that bad times are really over, while the head of HSBC – one of the world’s biggest banks – plumped equally firmly that we are merely setting for the next downturn. What are we to make of all this? I have no simple answer to the basic conundrum. The chief executives of Tesco and HSBC both carry weighty reputations, and each in his different way has access to a mass of detailed information. If they cannot agree, there is no use pretending to clarity.
Using the weekly Cycletrend chart, I think DJIA will continue to trade within the broad range and I will continue to buy the stocks I screened with KUTE system on dip and take profit at 10% target. Is 10% always my fixed target? Not necessary. I apply this target during time of volatility and broad range trading period. This profit target may change according to the market situation. What is most important to remember is to be consistent in applying the trading game plan and strategies regardless of market situation and I am constantly reminding myself to stick to my strategies and not get swayed by the market sentiments. It’s really not easy when market is rallying and friends around you claiming to make more than my returns, but since so many stock trading books and gurus strongly emphasize trader psychology and consistency in applying one’s strategies, I cannot be wrong and I believe I will be better off in the long run.
So here is one more principle I learned in stock trading; i.e. Greed kills and contentment is gain.
Have a good day ahead.
Francies Cheng
BBus MAppliedFinance
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