Making Adjustments

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While I do not want to jump the gun here, the market appears to be changing character in the sense that it is more of a stock picker’s market with narrow pockets of strength, while the bears are unable to crack it. The VIX is back down to the 20 level as volatility has abated in recent weeks. Now, over the past several months whenever the VIX has come in it has usually been an excellent opportunity to buy puts and play for a spike in volatility as stocks correct. The issue is whether the market is changing and therefore requires you, as a trader, to make adjustments.

In sports, the best coaches make adjustments in order to beat superior opponents, especially in the heat of battle. Obviously, if the game is easy there is no need to be too fancy. As we know, though, this market has been tough for quite some time now. Accordingly, making adjustments when necessary is key. I am seeing select strength in biotechnology stocks, materials, financials, and transportation stocks. Inside the 12631 trading service, we are honing on what it is working, trying to tune out all of the macro news and general grumblings by bears who have yet to make any kind of dent in this market in 2012.

I will have more analysis on my daily video market recap after the closing bell today…