China capping its annual rare earth output.

An interesting article just came out today on China capping its annual rare earth output, as it controls 97% of the rare earth materials market:
http://www.reuters.com/article/2011/03/31/china-rareearths-idUSL3E7EV0WZ20110331

Now.

The path of least resistance is up for now.

note: for educational purpose only

Miro's Studio

Positions are on, so we need to sit tight and follow the plan. Sitting is easier when we do something else while waiting for potential profits to realize.

Is there a viable way to trade gaps ?

Note: for educational purpose only, "gaps"

Be prudent about the risks you take, but don't be paralyzed by fear of failure.

What is your set-up ?

The lizard ... just hangs around on the rock ... and waits and waits and waits ... for his pattern to show up ... and when a bug comes along, he makes his move, right from the gut, without thinking about it. 
Ed Seykota on setups

Moral: When trader becomes that automatic, then he, too, can hang around on a rock and catch a lot of bugs.

Backing and Filling time.

Backing and Filling at this stage is very possible scenario. Backing and Filling leads to Consolidations, and Consolidations lead to Breakouts, and Breakouts lead to Trends.

Patience.

We need to be patient here and not get caught up in this reflex bounce, keep your cash ready and wait for new opportunity to present itself.  Watching and waiting is hard to do, but very important part of successful trading.

sideways 2011

Where are we now ?

The markets are down around 7% for now. Correction around 10 % would not be out of line with historical precedent.

Panic in the market.

Gap downs in stocks, commodities, and precious metals in the U.S. market that we are seeing are short lived during such crises situations. Looking back at history, this is true going back many decades.

Learn how to profit from stocks that go down.

The happy times in the stock market are interrupted once in a while by periods of gloom. Yes, if you look back at  history, the good times always return, but a lot of money always gets left on the table by people who refuse to play the short side. Learn how to short.

an idea, all time high

RVC.V

Always remember, the idea is not the same as the plan.

This is not a recommendation to buy ,sell or hold any securities.

Market experienced around 5% correction.

Re-read the blog,  What do I have to do now ? 

Run screens and isolate stocks that are gone down the least verses the market and put them on your watch list. When the market reverses to the upside these are the names that will potentially become the strongest stocks.

Winners Never Quit, Quitters Never Win

"Our greatest glory consists not in never falling, but in rising every time we fall. "

Author: Confucius  

" approach first, method second "

“As to the methods there may be a million and then some, but principles are few. The man who grasps principles can successfully select his own methods. The man who tries methods, ignoring principles, is sure to have trouble.”

 - Ralph Waldo Emerson (1803-1882)

You first have to start with the principles of trading. " The Approach "

What do I have to do now ?

Prepare

Isolating strong stocks when the market is weakest is a very simple idea that works. When most everything in the market is getting trashed, look for the stocks that refuse to go down. There has to be a reason for it. When the market resolves itself back to the upside, these are the names that will potentially become the strongest stocks very quickly.

Observe