The market closed in positive territory for the 3rd time in as many days building on its impressive winning streak. Moreover, the VIX closed below 20 for the first time since July 25th of last year. We continue to see the inverse correlation between the VIX & S&P500 play out and have no reason to believe it won’t keep doing so.
This morning we discussed the benefits of being in the minority when it comes to trading and today such a strategy did not pay off. However all is not lost, it isn’t like we saw the market surge 1% today, they finished higher but only modestly so. We believe you’re trading should be based on an answer to a simple question:
Over the next 2 weeks, will the S&P500 get closer to 1,350 or 1,250?
If your answer is closer to 1,350 then you should be buying this rally. If your answer is closer to 1,250 then you should be initiated short positions. The key here is having a belief and a pan for whichever answer you believe is the correct. In the end the market is great because it is a giant pool of disagreement, with many different people with varying opinions. Much like in sports, there is a winner and a loser. Do not lose because you didn’t execute your game plan though, whatever it may be.
Did you know that you can watch Stockhaven trade live in real time?
Learn how to daytrade by watching someone else trade! Watchhimtrade.com is the only site that lets you look over the shoulder of a professional daytrader.
Watch this video now where he shows you how it’s possible to make 100% in just 5 minutes!
Related posts:
- SH @ the bell 12/9/2011: The question that’s yet to be answered
- SH @ the close 9/6/2011: Markets slide but end well off session lows
- SH @ the close 10/18/2011: Buy the dips proves true again; bears get smacked
- SH @ the close 10/5/2011: Bulls stampede as markets continues to rally
- Stockhaven @ the close 8/11/2011: And the answer is…. BOUNCE
