Just follow the trend? Bah!

You don’t know how many posters continued to say to just follow the trend. I have been trying to warn them that there was a “full court press” underway to get you to believe and it was surely working.

Then, out of left field comes the SEC’s option expiration gambit to expose fraud in banking. Gee. Like the entire economic rescue isn’t fraudulent? Puleeze!

The way to play this is to look for the big breakouts in the stocks you follow and to identify the primary breakout levels. Then target that level in which to begin fresh buying.

There will be a bounce and then perhaps a more meaningful pullback. There will continue to be believers who will buy. But wait for a test of the primary breakout in your stocks. That is the proper entry strategy.

This plan is for swing traders, NOT the super fast day trader types. You guys, knock yourselves out, but expect some whipsaws for a change. Life may become much more difficult for you…

First they stuff Goldman Sachs Group, Inc. [[gs]] and every bank with billions of dollars. They overlook mass incompetence and rescue the largest misallocation of capital in history. They let them “bank coin” for over a year with ZERO risk.

Then they charge their right arm on Wall Street with fraud.

Are Obama’s poll numbers a problem now that he has allowed billions to be made on Wall Street again? Hasn’t Main Street gotten the memo of how important it is to “save” the banks so they can save the world?

By the time this administration is finished they will make GW Bush look like a genius.

Published on CreateCoin Premium…

AN EXCERPT:

I can understand how the “Royal Scam” and the eternal stimulus works. What I can’t quite figure out in relation to the stock market is where the sellers are. I’ve said long ago that those who had to sell were forced to do so in the two market crashes. But now that the markets have come all the way back to where they were before the crash, I would have expected supply to have an effect. After all, there is most certainly supply at current levels but everyone is now scared to sell for fear of missing out on more upside. It all looks very similar but inverse to February 2009.

Think about it. Your 401k/IRA money is in and spent. April is one of the best months of the year because of it. The Wall Street Complex needs you to believe and after ten weeks of record setting and historic rallying, you DO believe.

But the firepower is shot. We are above SPX 1200. The Fed-heads have been Jawboning endlessly. Why? To make you believe. The Newsweek article? Same shit.

I am not selling my longs yet and I am fighting the desire to short. I will miss this trade because the risk of being wrong is too great in this “engineered market”.

By all means, respect the action and the trend.  Trade well but don’t get married to anything for very long–if you know what’s good for you….Market’s are as lopsided as the most extreme times in modern history.  Use that fact as your guide.

I don’t need to speculate on bankrupt companies and neither do you. Unless you are Superfly, don’t play the lotto. It’s a suckers game…

On that note, I’ve been fighting the desire to ring the bell on Kulicke and Soffa Industries Inc. [[KLIC]] because I felt it was a $10 stock. I’ve always said that if Intel Corporation [[INTC]] is doing well, then KLIC must do well.

This is now a double for us. I really don’t want a double because if it can double that means it can get cut in half. But if you buy BEFORE the herd and have a little patience, it can pay off.

Listen, stop taking stupid risk. Don’t expect instant gratification. Keep your losses small. Be patient. Do all the cliche things that you know you should do and you can obtain investor balance, grasshopper.

BTW–Alcoa Inc. [[AA]] didn’t do too badly and will be on the march back to 15. Yahoo! Inc. [[yhoo]] was a great buy and will keep going because it is way too cheap relative to anything else.

So, the crap rises to the top.  It shows just how counter-intuitive the market has become. The “Royal Scam” of “saving the markets” has brought the most extreme kind of speculator to the fore–the ones who daytrade bankrupt companies because they are moving. This is a subset of almost every market boomlet.  They all say, “it doesn’t matter what they do or earn, I’m trading it”. And then it works.

This phase is great for the day trader and we have an enviroment where risk has been eliminated for the moment. So make hay because you all know how this will end. I’m not saying to stop buying lottery tickets because they are fun and exciting. I’m just saying that the lottery ends and you’ll be left holding a worthless ticket. Nobody wants that, do they?

The continued “rumors” of deals and takeovers are helping fuel the fire. Remember back in 1988-1989, after the crash of 87? (I’m at least 47). There was a massive takeover-related boom that continued for a year–until the UAL deal fell apart and the market corrected–sending us into the recession that should have happened after the crash–but was forestalled by the Greenspan Easy Money policy ver 1.0.

There continue to be a million and one reasons for this market to give back at least half of what it made in the last ten weeks. In fact, reality points to a market that should do worse. Technically, fundamentally, and valuation-wise, the market is past the point of extremes to almost any historical comparison. 10500 will be tested, maybe just for a second or two. But it will be tested soon. I wish I could tell you the day–perhaps one day next week…

Obviously the FED is basking in the glory of complete market domination and control. Don’t expect them to reliquish it quickly or easily. The egos there rival the egos of those on TV. Maybe bigger because the numbers are much, much bigger. The latest is that they will be “allowing” markups in MBS paper. That may be why banks have rallied. And since they bought $1.25 trillion in MBS, it may have been the plan all along. Let banks mark-em up and so can Uncle Sam.

In the meantime, markets did a good slug of volume to the downside today. But the volume has dissapated and buy programs are again ruling the roost. Dips are still not allowed. But look at the encluded monthly chart of the SPX. Do you want to allocate much new money into a pattern that looks like this? Unless of course you think this says we are going back to test our highs. Anything is possible in the “engineered” marketplace. In the meantime we continue to hold our longs and look for low-risk ways to participate in order to play this levitated and extended market.