Filed under: Deals, Bad news, Citigroup Inc. (C), JPMorgan Chase (JPM), Sprint Nextel Corp (S), Merrill Lynch (MER), Technical Analysis, Bear Stearns Cos (BSC), Stocks to Purchase, Stocks to Sell, Recession

Lots of massive important news out lately, but I’m not doing anything differently. Nor will I ever. Because I’ve matured enough over the past decade to sit, wait and strike only when I see all the variables aligned. And that time still is not upon us. By buying The Bear Stearns Companies Inc. (NYSE: BSC), JPMorgan Chase & Co. (NYSE: JPM) may or might not be getting a great deal, but I’m not smart, well-informed or interested enough to really care because there are still too many conflicting variables. I only care for ideal trading opportunities, of which there are none (for my style of trading).

Since January, I’ve been calling for a 10%+ market drop and warning about a potential disaster not because I’m psychic, but thanks to archaic industry regulations limiting transparency, for industry outsiders, there’s really no way how deeply troubled these financial firms are. Judging by Bear’s buyout price of $2, even well-informed industry insiders are scared to pay too much to take on such risk.

So, just as when I featured them last week, perfectly downtrending stocks like Sprint Nextel Corporation (NYSE: S), Citigroup Inc. (NYSE: C) and Merrill Lynch & Co. Inc. (NYSE: MER) will probably continue downtrending, only more steeply this week around.

And, the perfectly uptrending stocks like Quicksilver Resources Inc (NYSE: KWK), streetTRACKS Gold Trust (NYSE: GLD) and United Says Oil Fund (AMEX: USO) will similarly continue uptrending, if more steeply.

No, this is not magic or voo doo, it’s just basic trend following. Maybe that’s why trend following hedge funds and traders are all raking it in right now. Maybe that’s why you need to take up chart reading, to which I have devoted my entire mind, body and soul.

I leave you with one radical thought: trust no one and no company and focus on your investments’ charts.

Timothy Sykes writes the blog timothysykes.com, is a former hedge fund manager, star of the TV show Wall Street Warriors and author of the book, An American Hedge Fund: How I Made $2 Million as a Stock Operator & Created a Hedge Fund

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This entry was posted on Monday, March 17th, 2008 at 3:42 pm and is filed under Latest News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.