Dancing close to the door

It’s been a bit of a bumpy ride these last few weeks and there are many mixed signals around. Thus, we are trying to hold our opinions rather loosely and stay willing to change our minds whenever new evidence emerges that might contradict our views. Dancing close to the door is what we are constantly reminding ourselves of, as we might have to bail on some of our ideas rather quickly if our views turn out to be wrong. That said, let’s look at some trade ideas.

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Staying flexible

Staying flexible in your views and convictions is a vital skill if you plan to survive in markets for a long time. At the end of the day, being right or wrong hardly matters. Being able to change your mind when you are wrong and remain convicted when you are right is really the only skill that deserves to be trained.

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Time to wobble

The market has remained persistently strong. Relatively at least… U.S. markets are slightly higher, but locally markets are slightly lower. So, no real fireworks just yet. Perhaps the momentum finally shifts down, and we see the market come off a little? Particularly in the over-hyped tech sector. Let’s look at some charts and get a better idea of why we’re thinking what we’re thinking.

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Kansas City Shuffle

One of the more important lessons we’ve learned from participating in markets for the last almost two decades is that the Kansas City Shuffle is very often a very reliable move. What are we talking about you ask? Well, when everyone is looking right, go left. Still, what are we talking about? In a nutshell, the market has become very bullish, despite the enormous amounts of negative economic data and overall headwinds.

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It’s buy time!

Once again, we come to you with charts that are bullish in an economic landscape that is everything but. Like we’ve said many times though, our job as traders is to follow the market and take the opportunities it presents to us, not to ‘make sense of it all’. So, while we could ramble on about all the various macro headwinds like U.S. government and student debt, stressed liquidity and bank balance sheets, looming recession and so many other factors that cause worry, we will not. Instead, we will simply quote Jesse Livermore for the millionth time and say ‘a bull market climbs a wall of worry’. It’s buy time!

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American Bull

The American Bull stumbles blindly forward, without caution, directly into a looming credit crisis. Not perturbed by reality, the American Bull just keeps rallying without a care in the world, resolute to let the next generation pay for its foolishness. And so, headline U.S. Equities Indices, just, keep, trading, higher.

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Confusing markets

Perhaps we see a strong reversal of the Rand on Monday morning now that the U.S. ambassador has done a 180? All we know is that we don’t know. These are confusing markets. Best to remain cautious and defensive and ‘take the quick turn’ – as the saying goes.

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