The U.S. Stock Market continued its downward slide today as Congress is not yet ready to sign off of Treasury Secretary Paulson’s $700 billion plan to shore up the U.S. financial system. It is no surprise that there is a bit of a rebellion against the plan due to the sheer cost. The debate is of course the lesser of two evils…take your chances and see how things end up, or spend the money and hope the plan works, knowing that it will cost the taxpayers dearly.
I don’t envy the position our politicians find themselves in, but the fact is, many of them are part of the problem. And now, we are watching them all point the finger at everyone else but themselves. Par for the course in Washington, D.C.
As I have stated over the last week, traders simply need to stay cautious until the markets settle down. You don’t need to trade! All of the rules in the playbook have been thrown out in recent weeks and months, so the best thing to do is wait for a return to normalcy. Even if you are simply a daytrader, the whipsaws in the market have been enough to cost you big time, so you at least need to scale back your trading size.
Sooner or later, the markets will settle down, and whichever trend emerges, be prepared to hop on. In spite of the volatility in the markets in recent days, and some big moves in commodities and currencies, I still see many of the underlying trends have remained in place. Keep that in mind when you decide to plunge back in!
Good Trading!
Scott Cole
www.bestdaytradingstocks.com
www.kungfutrader.com
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