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SPDR Dow Jones Industrial Average ETF Message Board

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  • blackbelt1225 blackbelt1225 May 20, 2007 12:23 AM Flag

    How I'm playing the DIA

    Your trading strategy--and your assumptions--border on the insane. Did you ever see the movie called "Defending Your Life"? It's a great flick. Watch it this weekend and try to see what you're doing through Heaven's eyes. :)

    There is only one way to trade that has a rational basis. Wait for a signal, and then realize you may still be wrong because tops are extremely hard to call. The absolute best get it wrong. So take a position when clear, objective criteria are met. When you buy, commit to a maximum allowable loss, and stick to it.

    If the market does not correct hard this coming Monday, get out. Make no assumptions about anything. If you think this market can't go straight up for 10,000 points, think again. This sounds insane but go look at the Nikkei in 1988 and '89, the NASDAQ in 1999, and the Shanghai in 2006/2007 (see $SSEC on stockchartsdotcom. We don't know all the forces driving this market up, and we certainly don't know the total amount of money that could pour in from various sources to keep this market driving higher. It takes honesty, humility, and objectivity to admit what we DO NOT KNOW.

    A significant market correction could begin on Monday, and if it does, you will be rewarded for your risk taking. Then you will be tempted to think you know something, and the next time the market will just take your money back.

    Good luck. It's the greatest game in the world.


178.28-0.08(-0.04%)May 25 4:00 PMEDT