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Don't Give Up On Momentum

Mar. 28, 2014 8:36 PM ETANF, APOL, BBY, BMY, GPS, HLF, KING, BBWI, LOW, LVS, MET, NFLX, SBUX, TSLA, YUM22 Comments
George Acs profile picture
George Acs


  • External market moving events have been few recently, causing the market to be introspective.
  • Market analysts are increasingly suggesting there are signs of being near a top.
  • Too much pessimism and broadly distributed pessimism should lead one to pause and reconsider the crowd's track record.

I'm not really certain what persuaded markets to do as they did this past week.

Given the very wide range of interpretations for what caused the various ups and downs during trading, it seems like no one really had any clue of what was going on and influencing trading, although that didn't stop anyone from trying to explain it all.

With this earnings season having essentially concluded and the new one still two weeks away and with absolutely nothing seeming ready to implode or explode in the world, the market found itself in a vacuum and having to decide its own fate, while simultaneously being sucked along by whatever unexplainable momentum existed on any particular day.

That momentum changed daily and often saw intra-day swings, as well, with optimism being generally something reserved for the mornings and pessimism to end the trading sessions.

Like a child without guidance, it's hard to know what to do when nothing is happening around you other than random events. Add to that some native hyperactivity and you have a formula for unexplainable actions.

I think that may be the source of some of the confusion exhibited this past week. There were simply no guideposts and nothing to react to or against. Not even a Federal Reserve Chairperson's wayward words. When you are left to be alone with your thoughts and you begin to delve into your introspective mode, anything may come out from the other end.

Observations, though were easy to make and, of course, every casual observation led to interpretations and conclusions regarding what each event meant for the market's future.

Momentum stocks suddenly had the brakes put on them. The observations about momentum stocks was unending, but always led to the same conclusion.

That signals a top.

As a result, the NASDAQ was

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George Acs profile picture
I am a simple individual investor who believes that the playing field is level, but may require active management of one's holdings. I've devised a series of steps that constitute a highly defined covered option strategy that most anyone can follow and that I've described in Option to Profit (2011). Having retired from a career in Pediatric Dentistry, approximately 10 years ahead of schedule, after spending the previous 10 years working just 2 1/2 days each week, I now spend my time trading.For almost 5 years I alerted others of trading opportunities in large cap positions through the Option to Profit subscription service, a premium subscription service that provided actionable Trading Alerts via text messaging or e-mail at my old site www.optiontoprofit.com. As of January 2, 2017, the site  and the name "Option to Profit" are no longer mine. as I've again joined the dark side and taken the easy money. But I've returned to my blogging roots on January 2, 2017 by resurrecting the old TheAcsMan.com ad supported web site, open to all.That, too, ended and the new, subscriber based LEAPtoProfit.com which launched July 2018 and is geared to the less active trader who is either shifting into a "buy and hold" strategy, as am I in this next to final stage of my investing career or seeks to milk an existing "buy and hold" portfolio.Current;y. the LEAPtoProfit p[ortfolio is fully invested and the paywall has been removed until December 2019 when I expect an infusion of cash from position assignments.Ultimately, I hope to make my stock portfolio improve the quality of my life. Whatever stage of life you are in, you can make your stocks improve that quality by putting them to work for you and perhaps LEAPtoProfit can be part of that process.

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