Stock market direction remains probably the most important factor when investing through stock and options. As regular readers know I am not a believer in buy and hold investing. Indeed, just about every concept from buy and hold to dollar cost averaging, to penny stocks and well you name it, I just don’t believe in. The main reason is simple. I like strategies that grow my portfolio every month and every single year. Through using my stock and option investing strategies, I am not dealing with “unrealized” gains or “paper” profits. When I close a trade, the profit immediately moves to my portfolio. Each month trades end and profits build my portfolio. The compounding effect is obvious and unrelenting.
Market Direction Plays A Crucial Role
That said, market direction plays a crucial role. It is imperative that in general I am on the right side of the market direction. I want to profit from stocks whether they move up, down or sideways. If I put in place a trade that needs the stock market to move higher, then obviously I don’t want the market direction to sell lower. To that end each weekend I always review the past week and try to peer into the next week. It is actually not as simple as it may seem since there are many factors that can affect stocks and many are unknown factors that can seemingly come out of nowhere.
A good example would be Ben Bernanke’s comments this week. As one investor emailed me, “make up his mind for goodness sake”. Who would have thought that Bernanke would suddenly jump back to the Quantitative Easing band wagon right after announcing consideration of scaling back Quantitative Easing! These are the types of factors there is no control over.
Weekly Market Direction Forecast Is Essential
But despite this, having some outlook for market direction is essential when deciding on the upcoming week’s possible trades and what strategies to use. Everything from how far out in time and how close to at the money I should be considering are just two examples of issues I must decide on each week.
For decades I have done a daily market direction outlook and a weekly forecast to enter into my trades. Since starting my FullyInformed website, I have been posting my daily market direction outlook each evening after the market closes.
Weekly Market Direction Forecast Added To Members Section
I will now be adding a weekly market direction forecast for FullyInformed Members that I hope will show investors how I approach the market direction and my trades and the decision-making process I go through for various stocks. The weekly forecast is important since it tells me the strategies I should be considering for the week and those I should stay clear of. Each weekly forecast will discuss the weekly strategies I am using as well as why they are being used. I hope the weekly forecast assists investors in deciding on their trades for the week.