23 November 2011

PSEi 4,271.59. -18.16 points. -0.42%.

Another wave of selling hit world markets overnight.

BE 500 -1.31%
STOXX -1.87%
FTSE 100 -1.29%
CAC 40 -1.68%
DAX -1.44%
DJIA -2.05%

We’ve seen this pattern before and all the selling culminated in one of the best October equity rallies in history. Thus far, November has been unforgiving for equity traders. Out of the trades I’ve initiated, SM, SMPH and JGS have already hit my cut loss stops and I’ve unloaded them (JGS was actually breakeven). 12 bets remain active. Despite the turmoil, some are holding strong and remain distinctly up. Most are likely whipsaws, so I’m monitoring everything carefully on a daily basis.

Take note, though December may (or may not) yield another October-like Dead Cat Bounce, the situation in Europe is worsening. As they have when the crisis was limited to Greece, European leaders show a lack of unity today. The news trend points to contagion and a multi-country default.

http://www.bloomberg.com/news/2011-11-24/asian-stocks-decline-for-a-second-day-as-german-debt-sale-sparks-concerns.html

I remain about 50/50 stocks-to-cash. My approach to this clear and present danger is to stick to my trading system. Big trouble may lie ahead, and it may come faster than anyone expects. My system traded well through the US Financial Crisis in 2008, if a prolonged downtrend is coming, I know it’ll step out of the way. Trade carefully, people!

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