Having a directional bias in your stock trading can be a good thing and it can be a bad thing. We have all heard people refer to themselves as "bulls" or "bears". Sometimes stock traders claim these labels permanently.

While having a temporary bias can be understandable, it can still have a negative affect on your bottom line. For instance, the multi-year decline in the DOW had turned many otherwise objective traders into hard core bears. Naturally those who were short stocks from early October 2007 were right on track, especially when we saw the market nosedive below 7,000!

Now if those same bears stayed short they have had their profits eaten into quite substantially, but even that is not the point. The big quesiton is what do we do when we see the market change direction, which it started to do in March and April of 2009? Do we remain bears and stay short waiting to reclaim our profits eroded by the current uptrend? Some would say yes.

One important thing that we have to remember is that the best indicator of market direction is the direction of the current trend. There is no real reason to stick with a stock trade that is moving continously against you in hopes that the market will eventually go in your direction.

The entire point here is that effective stock trading requires flexibility. Sometimes that flexibility invloves admiting that your original trading signal was wrong. After that you may have to trade in the opposite direction…and that's OK. Our objective is to trade stocks profitably and not necessarily to feed our pride or our egos. If you maintain your objectivity and flexibility your opportunies for profit will continually multiply and you will trade more successfully than you ever imagined!

Today the DOW is sitting right around 10,450. Although the daily chart may look a little "iffy" the weekly and monthly DOW charts look poised to forge ahead into higher territory.

Naturally,  all this remains to be seen as we all find ourselves getting ready to feast for the Thanksgiving holiday. It will be interesting to see if Black Friday is as big a shopping day as has been anticipated by some analysts.

It remains to be seen if investors will lighten their load and sell off some of their holdings in an attempt too calm their nerves as we approach the end of the year.

Have a Happy Thanksgiving!

Is stock market timing accurate?  That is a question I've seen asked more than once.  The answer to the question is both yes and no so let me explain exactly what I mean. 

Firstly, accurate is being used in a subjective sense in the question.  If stock market timing were completely accurate and we all had access to this information then we'd all be retiring very, very rich.  In fact, if stock market timing was completely accurate there would be no need for the thousands of types of mutual funds because there would be no need for diversification.

No person or persons have any magical crystal ball into the workings of the stock market and can predict with pinpoint accuracy were the markets will go next. Many would-be market timers paint very broad strokes with their stock research brushes.  So broad in fact that even though the market may eventually go in the direction they predicted it would still prove difficult to profit based upon that prediction.  For instance, if some stock market guru predicts that the Dow is going to go up 4000 points then many investors may purchase stocks.  If, however, the market plunges 5000 points before that time many investors will have abandoned their positions at a tremendous loss.

So in the above example of someone asks if stock market timing accurate, then the answer would be in this case "eventually".  In the stock market there is a tremendous difference between being able to time the market accurately and being able to profit from timing the market.

So far the DOW hasn't been able to close over the 8000 mark since February 9, 2009. We came close last week with a high of 7931 and we are now back below 7800 again.

One thing is for certain….it has been anything but a boring year in the stock market. We had an opportunity to chat with Tony Spann about some of his picks. Here is what he had to say…"Well, I can't tell you the number of people who laughed in my face when I told them I was buying Ford Motor company when it dropped below 1.25. Some people I talked to even asked me, "What are you going to do next…buy AIG?" I laughed along with them and said that "AIG looks too good to pass up at 35 cents a share."

Well it doesn't look like they're laughing at Mr. Spann now!

We have been given a sneak peek at a stock trading system or more specifically a trading system for the QQQQ.

As an example of "getting it right" this system went short on September 4, 2008 and rode the QQQQ from 44.85 all the way down to 28.49.

We are going to keep you posted share our sneak peek at this system that is doing way more than holding it's on in these troubled economic times.

In markets like this we often think of surviving more than thriving. We worrying about our equity in our investment portfolios and retirement accounts and just want to stop the bleeding in most cases.

The current state of the stock market is a time when many smart investors are actively seeking and taking advantage of the many opportunities that they see before them. Those who trade based upon volatility will have all the trades they can handle.

So what is your approach? Are busy limiting your losses or looking for ways to extend your gains? Your attitude and actions during these trying times can put you well ahead of the game in the coming months and years.

We will sell C - Citigroup, Inc. on tomorrow's open.

We closed out our long trade in BAC - Bank of America at a profit today.

We will buy BAC - Bank of America on tomorrow's open.

We closed out our short BAC trade today at a profit.

We will sell BAC - Bank Of America Corporation on tomorrow's open.