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Fear & Greed Trader
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INDEPENDENT Financial Advisor / Professional Investor- with over 30 years of navigating the Stock market's "fear and greed" cycles that challenge the average investor. Investment strategies that combine Theory, Practice and Experience to produce Portfolios focused on achieving positive... More
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  • Market Update 9/15 - The Fed Meeting - Have No Fear ! 0 comments
    Sep 15, 2013 10:29 AM

    I mentioned last week that we continue to have our fair share of Fed Talk, and as stated I do believe we have a 50 - 50 chance of the Fed easing on purchases this week. I'm going to increase that to 80 -20, and in fact will be proven wrong on my earlier thoughts that we would see no taper. In that context I am not expecting any market reaction other than a possible "Knee Jerk" scenario on the announcement. If in fact that there is no taper at this meeting, I can envision the market selling off as most will believe the economy is too weak and they along with the media will invoke the "its time to sell stocks" cry.

    For the most part though I believe the market has already anticipated the lessening of asset purchases. As the dust settles on this either in the near term or in a few days , it will prove to be "much ado about nothing ". Any overreaction to the downside , will present some nice opportunities. Im getting ahead of myself , lets see what they do & How the market takes the news..

    Syria should move to the back burner and once again demonstrates how these panic moves over what now may turn out to be a total non event as now a diplomatic solution to this "crisis' is taking center stage.

    The market technicals also seem to be directionless as a few of my indicators have turned positive , but overall all seems to be in neutral.

    One fact that caught my attention is a spike in the bullish sentiment as the American Association of Individual Investors showed bullish sentiment spiked to a two-month high...However the indicator is not at an optimistic nor a pessimistic extreme.

    I have already heard the first chorus questioning profit growth and rising valuations as being an issue. Since we are once again nearing the highs, I am waiting to see what develops before we take any action.

    I gleaned a very interesting set of facts while roaming around the internet this past week, and added my own thoughts. Take a look and assess your "game' , don't be afraid to evaluate your past mistakes.. We all are guilty here, but its those that continually make them over & over who constantly struggle with the markets.

    Common mistakes made by investors :

    They think they are experts on world events

    Taking a long-term perspective is easier said than done. As we have seen with past issues , debt crisis, higher taxes , sequestration, Syria, to name a few. These events come & go and if the underlying fundamentals of equities are rising (Earnings etc.), in the end they have very little effect on the long term view.

    They want to wait too long -- until there are no problems

    This is the single most costly mistake. If there were no problems, the S & P would already be at 2000 or higher. Investing requires balancing risk and reward, not waiting for complete safety. I have stated over & over "The equity markets don't care about the 'absolute' of good or bad conditions, but about things being better or worse." Embrace that concept and the profits will increase.

    There is no magic moment. Resolving market worries is a process, not an event.

    Most fail to see what is working. Keep it simple - Don't "overthink" a situation.

    One of my single best strategies through the constant up & Down volatility has been buying quality stocks and selling calls for enhanced yield.

    That strategy may in fact be a continuing way to go here until we see further evidence of exactly which way the market may break. I will be updating the Call writing strategy series next weekend as this is options expiration week .

    Many don't take what the market is offering! Have your lists ready and Buy on the events that cause fear, whether it's an individual name or the market in general.

    Finally ,

    If we are disciplined and focused, then we are going to survive, whereas those that try to force things and don't trade with conviction will eventually fail.

    Always be ready to admit your mistakes ! --Easier said than done.

    Top of my "opportunity" list this week -- AAPL as mentioned again here on this blog

    I also like some REITS here that have been oversold and present value DLR , OHI, O (See Brad Thomas Articles on the REIT sector) I own all three in my core portfolio.

    Good luck out there.

    Disclosure: I am long AAPL, DLR, O, OHI.

    Additional disclosure: I am long other positions ( list available on this blog) , I am short Gold via

    Themes: Fed , Fear, Opportunities
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