The best way to trade this market
Timothy J. Truebenbach is the President of True Capital Management and
general partner of True Capital Partners LP, a hedge fund. He uses a
disciplined model that trades on the intermediate-term time frame. For a
free trial to Tim’s Nightly Stock Analysis Report
The
market continues to move forward in a positive, constructive manner
as we remain in a confirmed uptrend.
Fortunately, you heard it here first as we said that if the NASDAQ
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stand the chance of strong gains in weeks and months to follow. The market
rallied off its October lows and did just that. The index made a burst
through 2,200 and landed about 3.5% above this market before settling into a
normal correction and consolidation. This is where we currently sit as the
indices and most leading stocks still hold their ground.
Now is the time to look
around and figure out what is best for you to trade. This market is
recovering from a brutal Bear Market that took the NASDAQ down 78%. We don’t
have a lot of declines to compare this to other than the Dow of 1929; and that
one told us that the road to recovery is not always smooth and consistent as
the Bull Market we saw in the 1990’s. The rally can be wrought with
choppiness in individual issues, and even if you pick the right stock, you may
find it giving you mixed signals.
The best way to trade this
market has been to either be very quick and rotate among the leading groups,
or buy into several positions which include a broad-based index or sector to
spread out your risk a little more than I would normally preach. In either
case it is paramount that you position yourself in the fundamentally and
technically strongest areas. We have seen this come from leading sectors such
as Biotech, Retail, Semis, Internets and various Consumer segments. Nowadays,
there are tons of products from ETF’s to index and sector funds from companies
like Rydex that can help you accomplish a strong portfolio for any market. In
the simplest form, it is important to participate in the market if it is none
other than the NASDAQ-100
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If you do choose individual
stocks, you have the task of having to be very correct in your pick. Names
like Google
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can offer large rewards, but other such as Bebe
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can leave fairly large marks on your portfolio if bought incorrectly.
Whatever strategy you choose
for your portfolio, don’t forget to put a solid plan in place, follow it and
make sure to keep any losses at a minimum.
Best of luck with your
trading!
Tim Truebenbach
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