Leadership Remains Shaky as Stocks Fall in Lighter Trade

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The Stock Market continues to stumble; more noteably leadership is stumbling.

Our leaders are showing there is a lack of confidence with strong growing companies. This market is being moved by old leadership’ old leaders never lead new bull markets. Volume slid on Friday but the price delcines were a bit more worrisome. Markets like these are usually CHOPPY where intraday moves are large. The 1938 market saw its fair share of wild moves as the price action was very choppy as the market moved higher. I expect the choppy market to continue and this rally will stall out by quarter end if not beforehand.

Time frames should be kept very small and losses kept even smaller. Buying breakouts at this point still remains a dangerous game, buying support is prudent. Take gains when you have them to take do not let them slip away from you. This market will not produce HUGE winners and will only produce small gains. No matter your strategy, capital preservation should be your number one goal!

For example, ATHN a medical information stock can be bought here at its 50dma. However, your cut loss would be 3%, 5%, 7% and profits should be taken as soon as the stock shows you 10%. This is an example of how to operate in this type of environment. Expecting gains larger than 50% is simply unrealistic at this point.

Best of luck this week.

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