In last week's
edition of the Sterling Weekly I said that I was expecting
a Fall Rally into the Holiday season. Based upon Tuesday's trading
activity it appears that we may actually get the expected rally.
This week I have raised my target levels on the major market
indices that I track on a regular basis with the biggest news
being my new intermediate target on the NASDAQ 100 (NDX) of
As part of an ongoing series of articles I have been writing
about 11 "Rules for Trading" that I have developed.
I recently covered the Third Rule for Trading
in the August
12th edition of the Sterling Weekly, and this week I would
like to discuss my Fourth Rule for Trading,
"Do not be afraid to sell at an early profit and have
the opportunity to buy back at a lower price."
The logic and thinking behind the Fourth Rule for Trading is
very simple and builds upon on the 1st Three Rules for Trading
which focus upon protecting your profits, but also starts to
deal with the psychological mind set of trading. Many investors
and traders will have an initial price target when they enter
a position, and let's be honest even for the best of us not
all of our stocks will reach those price levels. When a stock
starts to back off or move against us, many investors/traders
will become fixated on their initial price target and violate
the 1st Three Rules for Trading resulting in their holding a
position at a loss. Meanwhile if they had been willing to take
their profits or let their stops trigger a sale, then they would
at least have the opportunity to re-enter the position the position
and possibly participate in another profit generating move.
It does not always work out that way, but at least they are
not letting profitable positions turn into loosing positions.
This is key to being a profitable investor/trader, because unfortunately
over the years I have seen many people with unprofitable accounts
simply because they would not sell profitable stocks when they
had the chance.
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Last week was a more active week from a trading
standpoint. It was definitely one that saw the market treat
our recommendations favorably.
Recent editions of the Prime Stock Newsletter
||Recent Close or Exit Price
||$41.59/share Aug. 29th
|Neflix, Inc. 'NFLX'
|Lowe's Companies 'LOW'
||$3.26/share Aug. 20th
|* The per share PROFIT is a theoretical
calculation based upon the opening price the day the recommendation
is published and the intra day high (or low for short sales)
on the exit day.
The Dow Jones Industrial
Today's Opinion: Closed @ 9,568.46
Current Expectations: Called higher on August 29th with
the close of 9,374.21 In last
week's edition of the Sterling Weekly I was expecting
a minor pullback to the 9,323.02 level, which was achieved
on August 25th, the Dow did not move towards our lower short
term target of 9,284.57 but turned back higher instead. I
am now expecting the Dow to move higher again and test 9,660.60
our target level first published in the Sterling
Weekly for August 18th.
The S&P 500:
Today's Opinion: Closed @ 1,026.27
While the S&P 500 did not move lower as I expected
it would when I published last
week's Sterling Weekly as the Dow Jones at least reached
our initial target level, the S&P 500 actually demonstrated
greater strength than the Dow Jones Industrial Average. After
giving it a day or two to move as expected, I reversed my opinion
and returned to the short term bullish expectations on the S&P
500, for the record I am bullish over the intermediate and long
term on the S&P 500. Current Expections: Called higher
with the close of 996.73 on August 26th. The S&P 500 should
move higher and test 1.057.86
The NASDAQ 100 (NDX)
Current Opinion: Closed @ 1,360.19
Current Expectations: Called higher on August 9th with
a close of 1,223.14. The NDX should move higher and test 1,385.01
and then 1,55.11 on a closing basis. On Thursday of last week
the NASDAQ 100 closed above 1,325.80 and in the process completed
a "cup pattern" with a measured move to 1,846.96
For better or worse, 1,846.96 is now our intermediate term
target on the NASDAQ 100 Index.