GOOD YEARS ALL COME DOWN TO A FEW GREAT TRADES…THIS IS ONE OF THEM
The market requires you to be actor. You have to adjust to its nuances the same way a good actor adjusts to the demands of different directors and costars. You must be an aggressive, singular minded profit machine at times. And then manage to morph into a timid lizard sitting on a rock and running at the first shadow that appears from the distance.
You can't always be a profit machine or you'll go bust. You can't always be a timid lizard or you'll never make money. You can't always be anything or you are not adjusting. Get it?
I've adjusted thus far in Q2 by pulling back from my aggressive posture that marked most of Q1. I wrote back then about a potential intermediate term top occurring in the April or May. We are now in April and the market is beginning to act like it wants to move into sideways mode is here.
Sideways mode has always been a challenging area for me as a trader/investor. I have tried on numerous occasions over the years to stick through sideways markets, despite foreseeing their arrival. Never once have I found the decision to slosh through the mud that is a sideways market rewarding.
Sideways markets have the tendency to turn stock picking into mush. You know where I excel? Stock picking. That is my scrambled eggs and chocolate milk. When the market turns my specialty into random acts of volatility based on absolutely nothing, it makes my methodology about as effective as throwing darts. Backing away is the only choice.
I'm not looking to get into 100% cash. I am, however, looking for opportunities to get more liquid.
Good years all come down to a few great trades. Preserving your gains during an unpredictable Q2 will be one of those great trades in 2012.
Tread lightly......
