Is this a good time to enter the stock market – July 2010

An article by pgupta    No Comments

Among all the positives that are making rounds in the stock market currently, one thing thats bothering the market guru is the trading volume. There doesn’t seem to be a huge interest in trading currently. Volume has died down once again since the market took a downward swing in May.

S&P closed above its significant 1100 mark. However due to low volume, I am still not ready to dive into the market. What should someone do in such a market condition? Let me list a few things that one should do in such market conditions:

1. Keep plenty of cash: Cash helps you to take advantage of downturn. Downturn is not always bad. If you see strong catalyst in the horizon while the market is tanking. That might be the time to throw some money in and it will return some nice $$
2. If you expect a bear market, shorting is a way for you to still make money if the market is tanking. Another way to invest in bear market is to take a look at reverse ETFs such as $SDS
3. Keep money in mutual funds and CD while you are not ready. So that will make some money while you are still pondering over the opportunities

Anyways seems like $aapl, $crus, $goog, $msft, $jazz, $arna are seto move up in next week or so. Be sure to have tight stops in place to prevent any unexpected reversal of the rally.