Are we at the tail end of the biggest dead cat bounce in decades?
There sure is a lot of bullishness out there for a market that has been essentially sideways for 2010. Are we at the tail end of the biggest dead cat bounce in decades or is the new normal of massive deficit spending, criminal government policies, and bankrupt state and local government the way to prosperity?
Well, the market has been on a tear since late 2009. More than a few have been against the recovery and lost. Those with a buy and hold/hope strategy has worked just fine….. provided you didn't make that investment between the late 90's and the end of 2008.
How long will this recovery continue? Does the relentless decline in the dollar point to a continuing increase in stock prices and your best strategy is to buy on the dips?
The most hard fought lesson that traders learn is to “trade what you see”. If the market is moving up….buy it, but have a plan for selling. If the market is moving down…short it, but have a plan for buying. It's a trader's market.
We are in the Bermuda Triangle economy. Good news is bad news and bad news is good. Your broker, Cramer, CNBC, and your government all have an agenda. It's not necessarily for you to prosper.
Trade what you see…..and have a plan for the reversal.
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