Still long but cautious

The market is at a stage where protecting profit from last 6-10 weeks is now critical. I am still long but extremely cautious. Protecting profits in existing positions is first priority currently.

There are still opportunities both on long and short side. I continue to see more and more stock joining the momentum universe. Some stocks which started out rallying in August are breaking down or correcting. At the same time number of stocks with recent good earning will continue to rise.

Whether you were bullish or bearish, there were opportunities on both side during the last couple of months. Many investor often make the mistake of being completely smitten by a hypothesis and stay on side line. Some are completely smitten by a guru or newsletter writer or TV personalities. In many cases they have no methodology to select stock. While I am primarily a long oriented trader, if you have been reading various comments left by Walter on various posts over the last couple of weeks, you would have seen he has a method to find stocks on short side and he has found opportunities in this rally on short side.

One of the ways to make money in the market is by focusing on equity selection methodologies. You should have a methodology to find individual stocks likely to go up or go down and play them. There are several ways to do this. What I talk about often earning/sales/price momentum is just one way of doing it. Value investor use different set of parameters to find good equities. Skillful short traders find shorts in most market circumstances by using various methods.

One of the wonderful thing about life and trading is, as they say once you decide the north of your life, you can find many ways to get there.