On the Trading Defensive

Sell first, find out later.

That's what the Europeans are doing with their stocks this morning. Of course, that makes sense. If you are trading in euros, you've got a lot on the line, you are up nicely and you don't want to give up your gains.

But that's not the case in the U.S. We don't have the big gains to give up, except in oil, and it doesn't make much sense to give those up in the face of terrorism, as every terror advance increases the price of oil, no matter what.

To me, we are stuck in transition. We have a Fed that doesn't really know what to do except tighten, we have a Madrid situation in London -- although not as bad so far -- and we have the defensive stocks being hit because of a stronger dollar.

To me, that seems like an occasion to steer clear still of the cyclicals, avoid the financials and play a barbell of defensives and oil with some pure defense thrown in. I want to pick at tech that's had a move that comes down on the London skirmish for my ActionAlertsPLUS portfolio.

I've been raising cash with my funds that I control. It's time to put some money to work in the chaos, provided that I stay defensive.