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Thursday, May 7, 2009

Mid-Week Recap: The Jaws of Death (PODCAST)

"Through memory we travel against time, through forgetfulness we follow its course." - Joseph Joubert

Welcome to the mid-week Recap!

I often tell ones ... don't forget about the credit markets! Don't forget about the TIPS, or the Bond markets! Don't become so entralled with the histrionic movements of the stock market, that you forget about the reasons why the stock market moves in the manner in which in moves.

It'd be nice if I remembered my own advice from time to time.

Because over the last month, I haven't been following the credit markets that heavily. Through a 'chance' discussion yesterday, I decided to start looking over the credit markets. A very interesting picture emerged.

This week provides a perfect example of what I'm talking about, which I discuss in the following podcast.

(Podcast Included. If you're seeing this entry elsewhere and cannot play the podcast? Click this link to go to the exact podcast entry ...)

Click here to download this podcast.

Now. This leads to another possibility (Especially for you forex traders out there). Think about this. Where has the market run to during every downturn in the stock market? The U.S. Dollar. The symbol I use for the futures market at the moment is DXM9

So go ahead, and pull up the U.S. Dollar, and look for areas of support along moving averages and price.

We don't know the future. But this is how I, at least, look for low risk, high reward possibilities.

Just something to think about.

Edit: As an aside, remember: The worst possible thing you can see, is for the bond and the stock market, repeatedly, fall together. Basically, what we had in October of 2008.

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Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

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