Stock Market: Where to Next?

We are riding the wave down, ready for a reversal – and love to buy cheap.

We had another day of weak employment data and the experts where surprised. At some points we are asking ourselves who the experts are? When you follow our publications: http://NeverLossTrading.wordpress.com you can read that we expect since a while a stronger underlying economy with solid earning and a continued high unemployment number. The US is a mature economy and will not add proportionate jobs to the economic progress. All European countries deal with this issue since 30 years.

As a result: we will show growth by good earning and retracement by bad unemployment numbers for the near term future – and this is nobody’s fault it is an evolutionary process of a mature economy.

So now comes the question: what happens with all those earnings?

The CEO’s of America know they are requested to do something and what do they do?

1. The high profit carrying companies will go out and acquire companies and grow their base using cheap credits available to them. In the acquisition they will reduce redundancy and people will lose their jobs.

2. Others will invest in new machinery and equipment that will make even more people in manufacturing jobs redundant. German upped their economic outlook based on higher than expected orders for machines and machine tools. Who do you think placed those orders?

Usually the heard is wrong. Currently everybody knows the stock market will go down – so after the correction of today they look right and w might see another sell off on option Friday (tomorrow). But this will not mean we fall back to an S&P value of 700. As a result, our strategy is to day trade only for now, waiting for the right moment to place a swing trading options position on one of the major indexes.

Options are often considered a risky investment, but with the right trading plan they make us more money on the way up and produce less losses on the way down. When we say such, we are often ask: But how do you deal with the overnight risk?

Our Answer: Overnight Hedge with futures if needed and day time hedge or leverage with futures.

It sure needs the right pick of an investment instrument and this is what we teach our students. If you are interested: contact@NeverLossTrading.com