Thursday, August 21, 2008

Will the Counter-Counter Trend Rally Last?

We're seeing what I'm calling a counter-counter trend, with oil and weak dollar stocks rallying. Normally, I'd just say this gets us back on the trend we've been on. But, with the action we've seen with sector rotation in the past month, who can believe any trend will stick? Those who've read my site know that I'm a believer of the medium-term trend of short financial stocks, short consumer stocks, and long oil service and infrastructure stocks. While I do think this will be the best investment strategy moving forward, it might not be the best one right now. These gains in oil stocks could easily evaporate by next week. So, as someone who doesn't "trade" a lot, I'd say you can move in and out of smallish positions in these counter-counter trend rallies to make some money, while we wait it out a bit.

I'd love to hear some other ideas/theories on how to play this market, so feel free to comment or email me.

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