This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

A Stock Market Correction Will Yield Trading Opportunities

By Jesse Barkasy

We have seen a big rally in U.S. stocks and that is what we are seeing still yet! With all the whining and crying and doomsday scenario gurus are selling with their newsletters, the markets have risen to new all-time highs. That is why we are trend followers. We listen to the markets foremost. The market is our boss.

Even though the U.S. stock market is very extended in price since moving up these last few months, the trend seems to be getting stronger in our opinion. Our attempts at testing the short side has yielded feeble results at best.

So in our last report we said we would fade the strong up moves in the markets but also look for stock breakouts to stay with our trend following philosophy. We try to catch the beginning of a trend reversal (which in this case would be a downward move) but we do not consider ourselves ever more right than the markets--and so we cut losses quickly and attempt to ride the current waves.

The markets are in all time high territory and so we expect a big improvement in the economy in order for this bull market to continue. This is what we believe the markets are telling us, not necessarily what the news is telling us though.

A correction is inevitable and so we believe we just have to keep our eyes on stocks that have charts that are not too extended if we are to initiate any large positions.

We also feel that there has to be a gradual comeback at some point for the commodity based stocks like steel, copper and coal for the market to really heat up. If these basic materials stand pat or gently glide down in price we believe we will be in great shape. If they fall hard we would say that the world economy has fallen into a dangerous deflationary spiral. If they rise hard, we believe inflation can take the breath out of the markets.

Right now we are looking for the sectors that are causing the markets to rise into all time highs. There are some really well known stocks like United Parcel Service (UPS), Target (TGT), Wal-Mart (WMT), Cree (CREE) and Google (GOOG) lighting up the new highs lists, so we are looking for emerging companies that show the potential to follow in their footsteps.

We have shared enthusiasm for this rally. However, as always we are very careful and ready for the potential corrective move or reversal to come.

The investments discussed are held in client accounts as of April 30 , 2013. These investments may or may not be currently held in client accounts. The reader should not assume that any investments identified were or will be profitable or that any investment recommendations or investment decisions we make in the future will be profitable.
Jesse Barkasy

Jesse Barkasy

I have traded my own accounts for 24 years and have worked as a professional trader for 13 years.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free


Chart of I:DJI
DOW 17,084.49 +33.74 0.20%
S&P 500 2,013.43 +15.91 0.80%
NASDAQ 4,830.47 +19.6820 0.41%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs