In case you missed it, last week was a victory for the bears… A lopsided victory. However, on Friday, late in the afternoon, the bulls came out strong and mounted an impressive bit if buying pressure.
So the question is, is this something that should be considered for the longer term picture? Is the “correction” over?
In my opinion, no. The issues remain and with little macro economic events happening over the weekend, you have to ask, what makes today any different? The answer of course, is nothing. Monday’s are often up days, and as I write this at 10:41 am Eastern time, we’re headed higher. Add to it that Europe has also moved from the red into the green, and we have the needed psychological bump to drive our markets up – for now.
For many, today will be an opportunity to raise the price on their stop loss orders. That’s a good thing – if you believe in stop orders (which I do not!). What we teach at OptionsAnimal is the use of the options instrument as a FAR superior approach to managing risk. I hate to be cliche, but all a stop loss is a guarantee of is a loss! Why not profit from the bearish trend without being short the equity? Why not keep ownership of your underlying equity and lower your cost basis in it? Seems to me to be a FAR superior method for trading.
The old “buy and hold” approach is no longer an appropriate strategy in this fast paced, often manic market. Using options along with equities provides a much calmer, consistent and superior approach to trading. This is what I have learned, this what I practice on a daily basis, and this is what we teach…
It is still time to stay hedged. Do you know how? If not, either get out of the market or learn how with us.
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