Rino: Market Outlook

The market is currently in a correction mode. The major bull market trend is still intact which I believe will restart in the near future. However, for the time being, mini bears rule the market. The last two days of positive gains in the market has no strength. It was based on outstanding performances of a handful of stocks, all in tech sector no less. The market as a whole needs more time to complete the necessary pullback.

As stated above, my long term outlook is still very bullish. Even with the credit crisis and oil hitting $90/barrel, we were able to manage our way up to record highs in all three major markets. I do expect the pace of the gains from here on to be slower than in the past but before proven otherwise, my money is on the bulls.

My shorter term view is rather bearish. I believe the market will need about 2 weeks to correct itself fully. In the meantime, I expect the market to fluctuate back and forth, creating a highly volatile environment with a stronger tendency to the downside. So the action that we had in the past 3 days should not come as a surprise.

The surprise factor that is in store for us is the fed meeting on the 30th. The market may form a bottom and move up like it did in august. The market may be disappointed if it gets anything less than a half point cut like last meeting and plummet after the release. Regardless of the outcome, I will try my best to stay out of the market until this date. Only after the fed decision will the market have an idea of where to go.

The only way to profit from this market is to be a day trader. However, you either make a killing or be killed in this environment. Thus, I've chosen not to participate and instead, practice the art of patience. Even this morning I was tempted to insert money into the market. However, the time is not right to buy calls and buying puts will only work on a day by day basis.