The market threw us a curve ball this week as technicals pointed to a breakdown. It can be very frustrating when the market throws a misdirection at you, but it is important to not let that take you out of the game. These types of reversals tend to turn into strong trends in the new direction.
We are already seeing signs of a strong trend developing again. The same old culprits that we profited from so heavily in September and October are once again breaking out to new highs and showing a great deal of momentum building. These include agricultural chemicals and metals and mining.
So yes, yesterday's stop outs were painful. Nevertheless, they free us up to play the true market direction, which revealed itself yesterday. Now we can once again put our money to work in the sectors that have been offering the greatest profits all year. We suspect that this week's losses will be regained quickly.
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