I can’t stress it enough, this market has a brain of its own. TA can just show the footprints but there are times when market doesn’t care about the conventional wisdom or the fundamentals of economy and goes on its own merry way. TA says market is overbought but the market action says that it could care less. The quicker one realizes this the better it is. Trading doesn’t have to be tough. It’s simple, just play ball with the market. Do not fight the market, leave that for perma-bulls or perma-bears.

There is no circus on this site but we understand the circus named market quite well. Keeping it simple is the key to the kingdom. I do not have any doubt about this and for that matter it’s applicable to all walks of life.

P.S. The content and the title of this post has been taken from a prior post dated July 23′ 09. It’s as relevant now as it was back then. No need to fix something if it ain’t broke.

Our portfolio has hit a new high this week in sync with new highs in the market.

Some of the recent feedback -

Followed you on the RIMM calls, barely a minute after I signed up. Couldn’t ask for better immediate results. – Ang

Congrats to your trades today, impressive start for me! I watched your blog for 10 month now, like your style, concise and simple. Very good trading. – Wendelin

Excellent work catching the day’s movers early. Yesterday it was RIMM and today is has been GOOG. I would not have done these trades on my own despite holding a firm desire to stay long. So in short, you helped achieve year’s worth of returns in 2 days without excessive risk. How do i become a subscriber “FOR LIFE”!!!!! – Bondwise

I’ve been receiving your email trades for a couple of days now and everyday I look forward to more of your emails. They have been very beneficial and I am enjoying the service I am receiving. – Nathan

I am very impressed by your alerts on 1st day itself. If you can trade well in such high risk market, then I think you must be giving excellent alerts on other days. – RJ

I’ve been following you for sometime and appreciate yr succinct clarity, insightful contribution to the ST’s site. – Mark Wilson

Every trade is in black and white here. Check the performance tab for details. Our USP is zero confusion, be it stock market analysis or trade execution.

We keep it simple here. We let the market do the heavy lifting for us. We let it choose the route and we just follow it. The problem with so called stock market experts is that they map the route for the market and expect the market to take that route. And then there are some megalomaniacs who think that they can dictate the market to do their bidding.

As for the market, long is the name. This market has ways to go on the upside. Nasdaq has already made a new closing high for the year. It’s only a matter of time before the other indexes follow suit. Some are saying that only Nasdaq has made a closing new high and that’s a bearish non confirmation by other indexes. I find this hilarious. If all the indexes do not make new highs on the same day then it’s a non confirmation! How intuitive? Who comes up with these fancy theories? I guess some folks would go to any extent to not desert their pre conceived bias.

Any correction is an opportunity. Now I do not need to show any chart or video to convey something as simple as this. If I show a chart then it will open a whole new Pandora’s box. Some will say that the volume is missing and others would say that the market is overbought. I can’t deny any of this but still feel that the market is going much higher. I trust my feel for the market more than anything else because it has kept me on the right side of the market most of the times. And times when I have been on the wrong side, it has conveyed it to me quickly. I am not worried of being wrong but always on the lookout to correct the mistake quickly if I am. Anyone aiming for perfection will not survive in this market, period. This market hates perfectionists. Just play ball with the market and it will let you make something out of it.

Gold and the stock market have been moving in lock step recently. Gold price action has been scattered lately. A few days back it got rejected at 1125 and it’s knocking at it again. I think if and when it breaches 1125 successfully, the door to 1200 opens up. If the correlation between Gold and market continues then it should also signal that market is on its way to the recent highs.

It was tough few weeks in the market but we managed to make decent return even in this period. We got caught in the downdraft in the middle of Jan but rather than being get caught like a deer in a headlight, we switched to the short side based on new ground realities. We do not care if the market goes up or down, we just care to be on the right side of the market. We understand that we will never be able to anticipate each and every turn but will try to sense the turn as quickly as possible. If the market can turn on a dime then we can change our bias too on a dime.

The following link contains trades based on alerts from the Thinking Trades service. It includes trades that have been fully closed as of 2/16/10. On a 30k portfolio, we have generated $17365 in profits, a return of 57.88% in 10 weeks . Since the portfolio was never more than 25% invested at any point of time, the return is much higher on the invested capital.

Click Here to see the track record

Next week is different, there is no expiration shenanigans to deal with. My thinking is that we may see some kind of pullback but it should be a great opportunity to get long. I wanted to short at Friday’s close but didn’t looking at the string of bullish Mondays recently. Market breadth is painting a bullish picture where as volume is not. I am in no hurry to take an aggressive stand right here. Money can be made effortlessly if one has cash to deploy when the right opportunity emerges.

The levels to watch on the upside are 1090 and 1105. The market may have dodged the bullet for now but we will know for sure next week. Most of the action this week will be colored by options expiration and I think it should be positive for the market near term. In short, keeping a long bias for now but will switch back to the short side if the market dictates. This market may hit headwinds next week but next week is too far out in the future to worry about right now.

My thinking is that hammer or no hammer this market is headed down. I think at best it will give a reprieve for a few days. This continues to be a dangerous market on the long side. I am looking for at least a test of 1010 region. This market should find significant resistance in the 1080-90 area. We are also entering the expiration phase and that too should color the market action. In short my bias is still to short rallies. There has been considerable technical damage done and it’s highly unlikely that we will get such an uneventful bottom. We will see, no harm in keeping an open mind but a firm bias.

I am amused that some of the perma-bears are preaching that this market is oversold and due for a bounce. Yeah these are the same folks who were shorting this market at every step of the way. There reasoning at that time was that the market was overbought and that there was no rhyme and reason for the market to go up. I think overbought and oversold are the most misused indicators. These indicators work in a sideways market but are totally useless in a strongly trending market.

At any point of time the majority of market participants fall into two categories, the ones who are taking pain and the ones who are being frustrated by the market. Those who are taking pain are the ones who are wrong about the market direction. Those who are being frustrated are the ones who are right about the market but are over thinking and trying to get cute with the market. They will try to catch every little move in the market and in the process miss the meat of the movement. Up until now bulls were being frustrated and bears were taking pain. Now it’s the turn of bulls to take the pain and bears to get frustrated. I would rather be wrong and take the pain than be right and get frustrated by the market.

In short, keep it simple. If you think that the market is going down then short every rally until market dictates otherwise. There is no point in playing the market if one doesn’t have the conviction to take a stand.

One has to be nimble and quick to adapt to the changing market conditions. There is no room for inertia in this market. I think the right approach now is to short rallies. At least not a time to be in love with the long side. Shorting is not easy but in my experience it’s the quickest way to make money because stocks go down many times faster than they go up. Market gave back the gains made in the last 2 months in 3 days flat. But shorting requires much more conviction, it’s not for the faint of heart, one has to believe in one’s thesis and stick to it in the face of big rallies that are going to emerge every now and then in a downtrending market.

In short time to get the bear suit out. I could care less if the market wants to go down or up but I care that it stays the course for some time so that one can relax and enjoy the ride without worrying about a U turn.