Lessons

1. If VIX is under 26, buy the dip. If VIX is over 26, sell the rip.

2. Always trade in the direction of the larger trend. Find the strongest trend in your time period.

3. Nothing as bearish as a failed breakout. Nothing as bullish as a failed break down.

4. Don't worry about the last dollar. Take your money and go to the beach!

5. No more than four positions at a time. Preferably 2-4. Scope out others. Pick the strongest.

6. Buy the strongest; sell (short) the weakest.

7. Nothing is guaranteed. Nothing.

Sunday, June 29, 2008

Zach Bass's plan

This is from Zach Bass' latest article:

"So, what’s the outlook for investors. Well, next week, as I suggested, there will likely be a bounce from oversold conditions in the markets. If the bounce is weak, it will present a good opportunity to take short positions. If it is strong, then we’ll need to wait and see, as a retraction may not be immediate. Soon after the market has retracted from the bounce, I would expect the VIX to breakout, and the Put-Call ratio to spike. As the VIX crosses 30 and nears past highs, and the Put-Call ratio clears 1.50, cover those shorts and go long. At that point we should be near a bottom. Then ride this puppy into Labor Day, and at that time, Apple can take the winners podium and collect its gold!"

www.zacharybass.com

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