I was right, in my last post last Friday “Braking Bulls” I said the trend going up is soon to slow down. There is no secret formula. What we saw were sharp declines then an opportunity for bargain hunting, but after the good run, it has to catch its breath. I also noted we have a new month (March) which had the previous months reporting coming in, and with a global stockmarket that bad, lackluster earnings, where are we getting the growth ? “Japan’s economy contracted an annualized 1.1 percent last quarter… China’s exports tumbled 25.4 percent from a year earlier in dollar terms in February as imports fell for the 16th month in a row.”
It’s going to be a wild ride indeed. We can’t go full on selling again though. It may be a quiet week in the US market but come March 10th the European Central Bank is expected to announce an expansion of stimulus. That’s going to be a possible move up, before the US Federal Reserve central bankers announce their own policy — which at this point is a toss-up. There were recent Fed official’s statement — Mr. Fischer says that inflation is accelerating (frankly he’s always been one of those wanting a rate hike!). “Fed Governor Lael Brainard countering that the Fed should not move until inflation proves its “persistence.”
I had a workshop last Saturday and it was a very interesting group, I was discussing how I use Options to create an income so that even in this volatile environment we are able to make profits. We use a strategy called Covered Calls using slightly out of the money Calls and I recommend it so the time value expiry allows us to make money on the upside and still have a protection on the downside. Next workshop mid-April so register your interest at firstname.lastname@example.org
If you care to be on this wild ride, I continue to just recommend having small positions, taking profits quickly in this volatile environment.
Enjoy this clip from Zootopia!