I received an email from someone who is worried that there won’t be enough big winners in 2014. You can’t worry about a whole year. You have to take things one day at a time.
“Therefore do not worry about tomorrow, for tomorrow will worry about itself. Each day has enough trouble of its own.” Matthew 6:34
As I preach, all predications are about the future and a lot of stuff can happen between now and then.
The only thing I can tell you with certainly is that the market action in 2014 will be uncertain.
That’s okay though. We don’t need to know the outcome for the whole year. We just need to pay attention to the short term and hopefully, some longer-term trends will develop. The driving at night headlights analogy comes to mind. You can’t see your end destination but you can see what lies just ahead.
Pick the best stocks—if any—giving current conditions and then see how things play out. And, use money management just in case they don’t. Remember though, a good offense IS your best defense.
If you are not too busy saving lives, building buildings, repairing automatic transmissions, or doing other great things, then come to the webinar later today. I’m going to cover all of the above in a lot more detail and show you want a really good offense looks like–revisiting my stock picks from the Stock Selection Webinar I did a few weeks back. They won’t always be this good (and that’s where money and position management comes in) but it pays to study periods like then for when it is. These are the ones that we have been waiting for.
If you haven’t already done so, see my 4 New Year resolutions in Tuesday’s column. I think if we do these things and do them well, we will prosper in 2014 even though right now the year is uncertain.
Now, let’s look at now.
The market ended the year on a high note. The Ps closed at all-time highs. Ditto for the Rusty. And, the Quack closed at multi-year highs.
As a trend guy, a market at new highs is obviously a good thing.
The rally has been very broad based as of late. Nearly all sectors are at or near new highs and even some of the weaker ones like the Metals & Mining have pockets of strength in their subsectors.
Speaking of the Metals, Gold and Silver stocks appear to be in the process of putting in a bottom. Notice I said “process.” It might be more of a process than an event. No need to be a hero just yet. Uranium, mentioned recently, also appears to be bottoming.
So what do we do? With the market at new highs, there aren’t a tremendous amount of setups (i.e. pullbacks) out there. If the market continues higher, we will likely see some setups on a “rolling correction” basis. And, when the market pulls back, we’ll likely see a plethora of setups. In the meantime, continue to focus mostly on existing positions. Take partial profits as offered and trail your stops higher. Don’t fight the trend—avoid the short side for now.
Best of luck with your trading today!
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