Always remember to cut your losses short and your powder dry to take advantage of the opportunities the market is giving you.

Market Speculator

Although we’ll be in a stagnant economy it does not mean we will not have opportunities to make money.  We’ll need to focus on the best in the best industries.  This is where we’ll find the excess capital flowing to.  Medicoracy will not be tolerated as consumers will have little excess capacity to spend and will only spend it where they feel they are getting the “BEST.”

I am certainly looking for inflated equity prices as capital will flow to assets that are seen as places to beat inflation.  Stocks and commodities are always seen as assets you need to own during inflationary periods.  Gold, silver, platinum, copper, agriculture, grains you name it for commodities it’ll be the place to be along with stocks.  Unfortunately, the downside will be those who are dependent on the government will be left behind and suffer the worse.  If you are on government support or know someone who relies on the government I’d suggest pushing them to be self-reliant because the US Government may not always be there.

Remember, always cut your losses short and your winners grow.

Market Speculator

Stocks took the widening of the yield curve very badly as the NASDAQ slide around 20 points in 20 minutes.  Yesterday marked the 5th distribution day for the leading index:  NASDAQ.  Remember, between 5-6 distribution days signals you should be raising cash by selling laggards and trimming back your winners.  Simply put, it is an insurance policy against further downside.

Moving back to the Treasury markets one does not have to look too far to see the collapse.  Just take a look at TBT and TLT.  Those two Exchange Trade Funds show the entire picture of what is happening in the market.  The only way out of this mess for the Obama Administration is to slash spending and cutting taxes.  Our country simply can not handle its current debt load and obligations and we are headed for a dollar and debt crisis.  Look at how the dollar is performing, UDN shows what is happening to our dollar.  America can survive and work herself out of this jam but she needs to act now and swiftly.

Looking ahead we have the durable goods number out this morning and GDP numbers our tomorrow.  If we can survive both of these numbers we can base in this market.  I noted in this post that we are getting long in the tooth regarding this uptrends.  It is quite possible we are simply resting and allowing stocks to setup in bases.  Although our Treasury situation looks bleak it does not necessarily translate into total destruction of the stock market.  Remember, we have red flags alerting us to lighten up on our positions, but that doesn’t mean to completely ignore potential setups.

Be nimble out there.

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Though I’ve lightened up on GMCR this week, I’m still holding a core position in the event the market continues with the rally at some point.  It’s been my biggest winner so far this year and, should the market indeed march higher, it certainly has the potential to lead the way.  That remains to be seen, however.  While some “leading” stocks like MDAS, STAR, INT, NTES and TNDM have hung in there, others have simply been taken out back and shot.  First they came for MYGN and I did nothing, then they took ALGT down….so who’s to say GMCR won’t be next?

Given the whipsaw nature of the market at present, the best advice today is the same advice Gerald Loeb offered back in 1961: keep those trades short-term.  It’s far better in this environment to get out of a stock too early than too late.  Things can change quite rapidly.  And in the words of David Bowie: “I’m much too fast to take that test….”

Positions: GMCR, NTES, TNDM