Tuesday, December 23, 2008

Sorry for the Absence

First of all I would like to allay fears that my buy the dips mentality has put me asunder. I mean, it would have, had I continued to follow a V-shaped recovery hypothesis that failed to materialize. As the crisis unfolded, it became clear that we were at the beginning of a prolonged period of economic change. As such, some serious revamping of my strategies was in order.

My personal trading has gone from directional to completely market neutral. I am no longer trying to make money on the market going in a particular direction. The market is sh#! and may remain so for much longer than expected. Thus arbitrage strategies (and the sure but small profit) take precedence over killing it on one side of the market.

I would not abandon the buy on the dips philosophy entirely. As this website points out, the traditional public sentiment indicator seems to be alive and well. This states that when the public is rushing to one particular side of the market, a smart trader had best be taking the opposite side of their trade. This chart shows that one could have used the google search traffic for the term "stock market" to time each major bottom we have experienced since Feb 2007. Pretty amazing to see it in action.

Sorry again for the disappearing act. My goal is to continue to provide quality content at a more reasonable pace. Keep it posted. Happy Holidays. Here's to a better 2009 for everyone!

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