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Jeff Pierce
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I’m a swing trader of momentum stocks with a holding period of anywhere from a few hours to a few months. I run a number of screens to locate the strongest/weakest stocks out there, using technical analysis to determine my entries and exits. Trying to calculate the intrinsic value of stocks in... More
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  • What Happens When The Dust Clears? 0 comments
    Mar 22, 2013 2:03 AM

    By All About Trends, who is offering zentrader readers a 15-day free no obligation trial offer. Use "zen" as promo code.

    Here's how we view recent market action:

    This morning when looking at the pre-market futures being up we saw a headline that said:

    CaptureMarkets shrug off Cyprus, investors bid up stocks, all eyes towards Fed

    Well first off investors did NOT bid up stocks, the market closed at X and opened at Y hence a gap up. What is the fastest way to get people's mind off a problem that's brewing besides give them another beer? Pop the market at the open.

    Secondly, shrugging off Cyprus? Well Duh! The banks are closed there. Here is what we want to know. What happens when those banks open? (IF THEY OPEN AT ALL) Do you really think there won't be panic after someone yelled fire in a crowded building then locked the doors on them? Honestly, ask yourself what would YOU do when faced with that situation. Would you buy into an everything is all right folks we've got it under control from the people who got you into this mess in the first place? Or would you use common sense and get our of dodge as fast as you can?

    The other thing we want to know about right now that you probably won't see on Main Stream Media (MSM) is what EXACTLY is going on with depositors in Greece, Italy, Spain. Here too, what would you be doing about right now. Let's also not forget about the New Zealand green party wanting to put the same deal on in the land of oz when a bank gets in trouble.

    The whole EU experiment is a stupid mess and you can't fix stupid. Just big macro picture reminds us of Humpty Dumpty and all the elite's horses and and all the eurocrats men couldn't? Well you know the rest of the story so we'll spare you.

    We also just heard today that the banks in Cyprus are not going to open till next week. IF true REALLY? (to us that is code for they have no clue what to do about the situation) as one of our subscribers quickly pointed out to us -- How are these people paying, doing business? eating?

    One thing MSM did get right though is that it is a fluid environment we'll give them that.

    Then we have the Fed today. Do you really think they will say anything to upset a fragile market that's already on pins and needles? Have they really ever? Not since Alan slipped with his irrational comments years ago.

    Now the other tidbit we saw was that of :

    There is a safety net called the Fed that is under the market now.

    This is how complacency is formed and built in the minds of investors. Complacency CAN be a dangerous thing too you know -- thinking the market can't go into a correction even though there is a QE safety net isn't a smart strategy. Why? Sept. Oct. Nov. correction that's why, that so called safety net was in place then too but it didn't stop the market from going into a correction.

    Look, just don't buy into this Alfred E Neuman "what me worry" state of mind because when the market gets hit those are the type of people who are going to be deer in the headlights and ride it all the way down.

    Add to that that we are now in a market DEPENDENT upon QE to infinity and beyond? Care to guess what happens when they take the punch bowl away?

    So all of that said and done -- where does that leave us with regards to the markets? Same place we've been, watching trend channel support and looking for names to consider buying when we get there. BE PREPARED IN ADVANCE for that, that is what the long side watch list is for. Know when we get there? You got it a news driven event in the face of fear is usually what it takes.

    We hate news driven markets. BUT (and this is the super important point we want to get across to ALL of you) the beauty of all this is that in order to be successful you have to be able to operate effectively in ALL climates and conditions. Case in point, look at all forms of motor-sports.

    Know who the best of the best drivers are? Those who can operate in all conditions, those who can adapt to all conditions regardless of what occurs. Those who fall off the horse, don't say a thing and get right back in the fight. You don't ever see these top of their field of endeavor complaining about this part of the track or that, they adapt! They DO NOT LET ANYTHING STAND IN THEIR WAY! And so should you!

    All of you who have been here for awhile know full well we spend a lot of time on helping YOU BE THE BEST YOU THAT YOU CAN BE and this is the next mindset YOU must install in your brain. Don't worry though as we'll just keep ingraining in your brain like we've always done.

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