Don’t Fight the Trend, Even if There Isn’t One

06/25/09 Chicago, Illinois

This sideways trade for the last few weeks is typical of summer markets, even in an “anything but typical” year for investors. Everyone is so conditioned for strong moves in either direction it has left many unable to handle an undefined trend.

The stall has disappointed many market watchers — with some calling for a new downturn. Over my years I have found it better to follow the trend without trying to catch the turn. Don’t be too proud to miss some of it. Most of the money is made in the middle of a trend, and that’s where we’ll stay here at Resource Trader Alert.

Volume seems light and something is needed to spark movement after the large bull run. The S&P 500 channel — with lows last week at the 899 level (as a support level) and highs at 925-plus — is an area to watch closely for future clues. At the same time, Treasury bond futures weekly highs at 117 and lows at 114 have held traders in check. The breakout for either asset class will light the way down the future path for the markets.

For now, let’s wait and see what trend develops. Have some wine, and let the market sort things out.

Alan Knuckman

Commodity expert Alan Knuckman hails from the home of commodity trading in Chicago, where he began working as a clerk on the floor of the Chicago Board of Trade (CBOT). Alan’s worked with all aspects of the commodity markets for the past 18 years – and now he brings his inside knowledge on energies, grains and gold to you. Alan is currently the editor of Resource Trader Alert, a trading service devoted to raking in profits from hard commodities.

Special Report: From Hulbert’s No 1-Ranked Advisory Letter Over 5 Years, GOLD $2000: Five entirely new ways to play the gold trend and a hidden way to snap up gold- for less than one penny per ounce!

View articles by Alan Knuckman

The articles and commentary featured on the Daily Reckoning are presented by Agora Financial.