I see no logic to the market these days, I know the market looks ahead, but I cannot understand what with the risk of reduced earnings and high debt which so many companies find themselves in these days I fear that this has not really been taken into account. A lot of companies have held their own by reducing costs with staff cutbacks and closures, but what happens next if we get no growth...?

I am still top heavy with small oils even though I have reduced them on the way up, but I am in a far better position than I could have dreamed of just a few months ago. Sounds like a different world with the London AIM Exchange looking more and more crooked as the months and years roll on. Pretty certain this worldwide 'funny-money' rally has had its chips and a couple of months in the doldrums await.

Having seen the last minute spurt by the Dow Jones tonight I wouldn't be surprised to see a climb back (and even just beyond) the recent highs but I can't spend all day watching and waiting for the lows then highs of that particular 'whipsaw'. So will hold this oil short for a few weeks now if possible without trying to trade it, with a notional stop of $69 just in case things go barmy.

I am very short term in some of my trading now, I probably close positions too early whether long or short, but from a personal point of view this is a preferred option for the forseeable future. In fact I prefer taking profits early in this climate. If it goes down instead, then bail early. If you get that 'queasy' feeling after you've bought something that looked good at the time - sell it, without a further thought.

All my major blunders have come from thinking I could just leave my money sat with a 'good' company for months or years - and narrate tales to my grandchildren about how I held that 100-bagger through thick and thin. It's all very bent out there, and any sort of complacency comes before a fall - so you do right to be cautious, however galling it is to see them rise after you sell. Barclays was a 6-bagger in two months, Northern Rock on the other hand ended up as a 'minus infinity' bagger in one day.

What now though for the overall market? Share my cynical outlook on Jun-Oct? Crude oil was at this level mid-06 and everyone thought it was starting to get a bit crazily on the 'high' side. I can't accept that two years later in the middle of a recession that it is anything other than a demented level for it to have achieved - hence I'm short.

Another useful barometer to use is investor discussions and forum posts - usually a peak of activity tends moreorless to match the peak of a rally, a point that I keep remembering. It is worth noting here that people who are late to the party are less likely to sell quickly and are the most likely to lose money.

A good friend who sadly lost quite a lot of money on the banks amongst other things and who has shown only a very passing interest in using stop loss orders...etc has recently started chatting more happily about his portfolio and has been topping up. I sincerely hope it works for him but I'd rather take this as a sign to start selling some positions and tightening stops. As someone I know is fond of saying, we wait, but my feeling for what it's worth is that we're likely to head back to 4000 but I suppose until we break down below 4300, all bets are off.

Contracts-for-Difference.com monitors and reviews CFD brokers like IGMarkets so you know which sites offer the best experience for you to trade at. We also help answer all your CFD Trading Questions with our daily, expertly written articles, and extensive interviews with industry participants.

Article Source: http://EzineArticles.com/?expert=Andy_Richardson