Rev Shark: Morning Outlook
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Rev Shark: Morning Outlook
Rev Shark
"Bullish Stance Is Buoyed by Still-Promising Charts"
12/03/03 08:16 AM ET
"The reason worry kills more people than work is that more people worry than work."
-- Robert Frost
"Stock market participants can always find something to worry about. We worry that when things look bad it will continue that way forever, and we worry that when things are good that they will come to a screeching halt at any moment. If there isn't something tangible to worry about, our imagination can always provide something. We worry about waking up in the morning and being greeted with a stock market crash or a terrorist attack or a major disaster.
A little worry is a good thing. After all, it really is a dangerous world and bad things do happen. Caution is often warranted but if we let our worries go too far we'll end up doing nothing as we wait for the sky to fall.
One of the consequences of the bubble days and the subsequent bear market is that it is very easy to worry about being caught in the same situation. After all, the market is up huge and we keep hearing from the fundamental folks about how expensive stocks are on a historic basis. Isn't it sensible and reasonable to worry about another huge meltdown like we saw in 2000?
A repeat of that scenario is certainly a possibility. So do we give into our worries, move into cash and wait to see if the prophecies of doom are proved correct? You could do that but you are likely to miss out on some very good opportunities to make money.
The way we handle our worries is to develop ways to control our risk. We don't stop trading because we are worried about an uncertain future. The future will always be unknown. What we do is develop an approach that keeps us in the game but takes us out when there are real tangible signs of trouble and not just our imaginations at work.
For technicians, that means you pay very close attention to the charts that are in front of you and react to the pattern as it exists at this moment. You don't worry about surprise events that you can't control. You stay focused on the technical picture and react as it unfolds.
The bears can provide you a very long list of the things you can worry about but they are going to have some difficulty finding major problems with the technical picture now. Yes, we are somewhat extended, but the uptrend is intact, there is momentum in place and we continue to drive to new highs. Sure, that picture can change quickly but for now there isn't any compelling reason to dump your long positions and go hide in the basement.
One of the reasons I've maintained a rather bullish stance for a while now is that I continue to find individual stocks with promising chart formations. There are good setups out there and I can't justify letting vague macro concerns keep me from a trade when the odds look like they are in my favor.
Monitor your positions and work those charts. Those are the things that will tell you when the market is becoming dangerous. If you spend time looking at what is in front of you, the inclination to act on vague worries and concerns about the future will fade away.
Early indications are close to flat. The dollar continues to struggle against the euro and remains an important topic of conversation. There is talk that the Fed will need to start signaling the possibility of interest rate hikes in order to help support the dollar. European markets are slightly higher, while Asia is mixed. Spot gold is down slightly but continues to hold about the $400 level.
The analysts are saying nice things about Comcast (CMCSK:Nasdaq), Intel (INTC:Nasdaq) and the pharmacy benefit managers. The economic calendar is light, with only the ISM Services number of any major consequence.
The market was acting fairly well yesterday until it was hit by a big option trade that brought in some selling. Will the bulls regroup and make another try today or will the bears try to build on yesterday's reversal? "
(in www.realmoney.com)
"Bullish Stance Is Buoyed by Still-Promising Charts"
12/03/03 08:16 AM ET
"The reason worry kills more people than work is that more people worry than work."
-- Robert Frost
"Stock market participants can always find something to worry about. We worry that when things look bad it will continue that way forever, and we worry that when things are good that they will come to a screeching halt at any moment. If there isn't something tangible to worry about, our imagination can always provide something. We worry about waking up in the morning and being greeted with a stock market crash or a terrorist attack or a major disaster.
A little worry is a good thing. After all, it really is a dangerous world and bad things do happen. Caution is often warranted but if we let our worries go too far we'll end up doing nothing as we wait for the sky to fall.
One of the consequences of the bubble days and the subsequent bear market is that it is very easy to worry about being caught in the same situation. After all, the market is up huge and we keep hearing from the fundamental folks about how expensive stocks are on a historic basis. Isn't it sensible and reasonable to worry about another huge meltdown like we saw in 2000?
A repeat of that scenario is certainly a possibility. So do we give into our worries, move into cash and wait to see if the prophecies of doom are proved correct? You could do that but you are likely to miss out on some very good opportunities to make money.
The way we handle our worries is to develop ways to control our risk. We don't stop trading because we are worried about an uncertain future. The future will always be unknown. What we do is develop an approach that keeps us in the game but takes us out when there are real tangible signs of trouble and not just our imaginations at work.
For technicians, that means you pay very close attention to the charts that are in front of you and react to the pattern as it exists at this moment. You don't worry about surprise events that you can't control. You stay focused on the technical picture and react as it unfolds.
The bears can provide you a very long list of the things you can worry about but they are going to have some difficulty finding major problems with the technical picture now. Yes, we are somewhat extended, but the uptrend is intact, there is momentum in place and we continue to drive to new highs. Sure, that picture can change quickly but for now there isn't any compelling reason to dump your long positions and go hide in the basement.
One of the reasons I've maintained a rather bullish stance for a while now is that I continue to find individual stocks with promising chart formations. There are good setups out there and I can't justify letting vague macro concerns keep me from a trade when the odds look like they are in my favor.
Monitor your positions and work those charts. Those are the things that will tell you when the market is becoming dangerous. If you spend time looking at what is in front of you, the inclination to act on vague worries and concerns about the future will fade away.
Early indications are close to flat. The dollar continues to struggle against the euro and remains an important topic of conversation. There is talk that the Fed will need to start signaling the possibility of interest rate hikes in order to help support the dollar. European markets are slightly higher, while Asia is mixed. Spot gold is down slightly but continues to hold about the $400 level.
The analysts are saying nice things about Comcast (CMCSK:Nasdaq), Intel (INTC:Nasdaq) and the pharmacy benefit managers. The economic calendar is light, with only the ISM Services number of any major consequence.
The market was acting fairly well yesterday until it was hit by a big option trade that brought in some selling. Will the bulls regroup and make another try today or will the bears try to build on yesterday's reversal? "
(in www.realmoney.com)
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