Ignore the News – MDRX OCR PRGO PRX

Last weeks sharp sell off did not have any follow through to the downside and already we are making new highs again. All you can do at this stage is continue your investing (or holding if fully invested) and hold your breadth. Hopefully last weeks big down day or tightening of your sell stops have not caused you to close out of too many positions.

Now for some fun.

Here are a number of reasons NOT TO BUY stocks …..

1. We could enter a double dip recession.

2. This recovery is considered a no jobs recovery.

3. We have massive deficits.

4. Taxes are climbing and will kill growth.

5. The economy is improving on borrowed money which is artificial.

6. Still lots of people out of work.



Here are a number of reasons to BUY stocks …..



1. The recovery is strengthening.

2. Interest rates are low and may remain low.

3. From such a deep recession things can only improve.

4. GDP is positive and growing again.

5. Employment is improving even if slow.

6. Corporate profits are improving.



OK so if that doesn’t make your head spin then nothing will. There will ALWAYS be the optimists and there will ALWAYS be the “doom and gloomers”. Since there are thousands of variables to assessing the economy and since there will always be the optimists and pessimists then I say ignore it all for your own good health. As I have said many times just look at price and volume. If stocks are climbing on high volume then somebody with influence and buying power knows something. All we can do is follow their coat tails. If we see selling on heavy volume then stay away – it’s that simple. Listen to the news or both sides of the debate and you will forever be stock trading. You don’t want to trade you want to invest. News creates unnecessary volume for the stock market and commissions for the stock brokers. Follow your stock charts with price and volume not the noise.



By the way those “doom and gloomers” have just lost one year of good market gains. Yes one day they will be right and of course they will say “told you so”. I say take advantage of any stock market rises and be sure to have your money management and risk protection in place, as we have discussed in the past. I don’t know what the future holds and neither do the optimists or the “doom and gloomers”. Do not listen to the news, or the optimists or the “doom and gloomers”, bottom line is nobody knows!!

Here are a few companies that have recently broke out on high volume. They are NOT “hot stocks”, they are just stocks for your review. Add them to your watch list and study their reaction to the recent jump up on volume. If they fall back on high volume then remove them from your watch list. I consider watching price and volume as probably the only real technical analysis you need. As an investment strategy this will beat most. If the stocks stabilize in a quiet zone with very little selling then it’s time to buy using sell stops of 10% on just an initial small purchase of that company. Remember don’t buy if earnings are imminent (be careful we are in earnings season now, check your stocks).

MDRX - $21.61

OCR – $29.99

PRGO – $60.58

PRX - $27.86