As you’ve read in our last post we’ve been sitting on the side lines for the past 2 weeks. The main reason being that we were unsure where the market was headed — Up or Down.

We may and I emphasize may have caught a break. On Friday, amid not so horrible jobless data, the QQQQ’s went up 2.5%. Now that doesn’t sound like a lot until you realize that it’s been a while since we saw this type of up tick. And this wasn’t just the QQQQ’s — Nasdaq, DJIA, S&P and alot of stocks went up quite a bit.

So What’s Next?
The QQQQ’s have been bouncing back forth between a specific price range, but if the QQQQ can break past $41 then it looks like we may been in for a rally. And if this turns out to be the case then this might give us some really good gains.
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In the meantime enjoy the Labor Day Weekend and here’s to a great Tuesday opening.

As I mentioned last Sunday – “my recommendation is to stay on the sideline at least until we know which direction the market is headed”. Currently one the main indexes that I watch is the QQQQ and it’s still hovering around the same $40 range.

The only ones profiting in this market are option writers. It doesn’t matter if they’re writing calls or puts — neither of those options are worth anything unless the market goes in a specific direction. And since the market is not going in any direction there is no incentive for the option buyers to profit from the options and so the option writers get their premium and no one is going to be exercising their options for the time being.

As always stay tuned and let’s hope the market picks a direction this week!

That’s not the right question though. The right question is why is the market acting like it is? That answer is a little bit more difficult to answer isn’t it. There could a hundred reasons why investors are feeling more optimistic. So let’s focus on what we do know. The market is volatile right now – there’s no telling if a week from now it will have switched from going up to going down again.

Volatility can be good and bad but in this case because of the amount of volatility that’s affecting the overall markets — my recommendation is to stay on the sideline at least until we know which direction the market is headed.

How will we know when and where the market is headed?
One of the main indexes that I watch is the QQQQ, which is the top 100 Nasdaq stocks. Since the late July (July 25 / 26) it’s hovered around $40 (between a high of $40.20 and a low of $38.50). If the QQQQ breaks past either of these numbers then we’ll have a better idea of which direction it may head.

Same can be applied to other indexes such as DJIA, or S&P 500.

For now keep watching and if it seems the market has finally decided which direction to move I’ll make our recommendation on some stocks.

Stay tuned!

There are a lot of reasons why but overall the main one, in my opinion, is that the stock market needs to cool off. Only time will tell if this was a cool off or a major shift.

We’ll see how this affects our current 2 open positions – QQQQ & ATVI. I’m also considering buying IDC, but we’ll wait to hear from the FED and see how the market reacts.

Stay tuned!

IDC - Interactive Data Corp
Meanwhile there’s another stock that is looking like it’s heading up – IDC. We’re going to be watching it today and if possible even buy it. The charts are looking great. It’s down from $25 in June to $22.50 today.

QQQQ - It’s still at $39.75!
It’s difficult to gauge what direction QQQQ and the overall markets want to move. In the last 5 trading days the QQQQ stock has stayed at almost the same $39.75. This usually means both buyers and sellers are battling it out and we’ll know the winner soon – hopefully. At this point pretty much any bit of good or bad news can sway the market. Be careful. Don’t buy, if you’re holding don’t sell unless it starts to head down.

That’s fine. They’ve had a good run for the past few weeks and some of them months,  so it seems appropriate that they need to cool down and establish support before they head higher.

I’m very close to recommending that you sell the remaining 2 stocks that we’re holding. But I’ll wait until tomorrow to make that decision.

How Was Your Trade?
If you were one of the investors that made a few percentage from our recommendations then please post your comments or email me directly.

Netflix – Sell
On July 30 we recommend Netflix and since then it’s gone up from $42.50 to $44.50 – about 4% in a few days. Not bad. We’ll sell it for now and then once it’s gone down significantly we’ll buy it again.

Apple – Sell
We also recommend Apple and since then it’s gone from $161.00 to $165.00 – about  2.5% in a few days. Not quite what we were hoping for but not too bad.  Same as above we’ll sell it for now and then once it’s gone down we’ll buy it when it’s low.

QQQQ – Hold
The charts say it’s overbought so it might be a good time to sell but it may also go up on a wave of good news. So for the time being don’t buy, don’t sell.  Hold if you have it.

ATVI – Buy (if you haven’t already bought it!)
We also recommend ATVI last Thursday – July 30th.  ATVI was looking a bit iffy until today when it shot up 3.5% in one day. It’s looking like it’s headed up so I’d recommend buying but only for a few more days. After that it may be overbought.

Have a great Tuesday.

Watch List
SBUX – Starbucks

COST – Costco Wholesale Corp

ELNK – Earthlink, Inc

VDE – Vanguard Energy Vipers

If you see a growing company with good trading volume that you think should be included then send us an email and we’ll consider it.

Also notice we’ve added in a stock ticker on the right side, which will allow you to track the stocks. I’ll be tracking them closely to see how they perform and when to sell them.