(speaking of contrarians, please see a discussion of the best book on Contrary Opinion Theory in our blog. At * a copy it is a pretty safe investment :-)Dear Spikers and SpikeTrade Members,Hello and best wishes from New York. Kerry has just arrived here – to spend a few days working together, to have his ‘sushi fix’, attend a campers’ meeting, and then to fly down to the Caribbean for some pain & suffering in the 2009 Traders’ Camp.Congratulations to the group on completing a very successful week. The 88% success ratio was awesome. We also must tip our hat to high-performing SpikeTrade members. Every week they participate by sending in a volunteer pick, they earn an $3 credit towards membership renewal – or $20 credit if their pick beats the Bronze Spike pick for that week. Two members scored $20 last week – Pat L and Steve M. Congratulations to all!”There is many a slip between a cup and the lip” – I first heard this phrase in my 20s’. Someone said it to me soon after I discovered the stock market. What brought it to mind today was my performance – or rather non-performance – on my favorite Spike pick for the previous week. As last Sunday went on, I kept turning over Spike picks and decided I liked Susie’s ‘short QSII’ best. I spelled out a trading plan for myself and e-mailed it to Susie. I should have sent it to Mr Market instead! I had a fairly elaborate entry plan, but Mr Market did not know that – it went down from the opening. The missed opportunity rankled me so much that I recorded a video about it – ‘the one that’s got away’ – and posted it on our (free) blog. Take a look and post a comment if you like!What’s next on the market’s agenda? Bet on the bull or the bear?

Dear Spikers and SpikeTrade Members,Best wishes to ya’ll for the New year. This is the year when the stock market is guaranteed do one of three things: it will either go to hell in a hand-basket, rally into a new bull market, or spend the year meandering in a trading range. Which of the three will it be? During the move to a new slum I have mislaid my crystal ball, but I can tell you what I am determined to do. I expect a lot of cross-currents in the months ahead, and will concentrate on short-term trading, rarely holding a position over a weekend during Q1. I can think of no better place for a short-term trader than in the SpikeTrade. With a wealth of trading ideas coming to us every week from Spikers and SpikeTrade Members, I feel like a kid in a candy store.

Dear Spikers and SpikeTrade Members,Congratulations on an upbeat conclusion of the brutal Q4-2008 and of the entire year. 2008 will be remembered as one of the most eventful years in modern financial history – right up there with the Crash of 1929, the oil embargo of 1974, and the Crash of 1987. The most important thing to remember is that each of those earlier disasters – which caused countless losses and waves of human misery – marked the beginning of a new long-term bull market.The horrendous news are coming at us in an avalanche – the bankruptcies of key banks and even smaller countries, the huge frauds becoming unearthed and leading people to suicides, the future of the entire US auto industry being brought into question. It may be easy to become fearful and depressed – but that would be just the absolutely wrong thing to do! At the bottom of every crash there are fantastic, once-in-a-lifetime opportunities. Together, we will be scouting for those opportunities here in SpikeTrade.com

How many folks have left the markets? Where has all the money gone that was not lost. These past few months have no doubt been a traders market and we are likely to see these conditions exist for some time. What I am suggesting is longer term investors (as in 1 – 3 years) are not likely to see returns in the markets as in previous years. Gains will be difficult unless you have shorter term horizons until the new rules of the game are determined. The knee jerk reactions and lack of follow thru is due to no real buyers (or investors) willing to put large sums of money to work. Many hedge funds have or are going bust. They are definitely not getting new money to put to work in these dire times. Many mutual funds have seen huge redemptions. Some of the most famed investors/traders have said they are completely out of the market. With no new money flowing in, that leaves only the traders that dare to tread these treacherous waters. Short term traders zig and zag, never holding on to anything very long. Traders take short term profits to help reduce their risk exposure over time. Traders are happy to pick up nickels and dimes many times over. It appears most left in the water are those that have not sold and have no intentions to do so and the short term traders. This may indicate a lot of splashing is going to occur. Only when traders get a bit tired and wants to take a break will the waters calm, then they will all go splashing again.In the last few weeks we have seen 30- 90 day US Treasury bills trade at a rate of negative interest. Does this mean people are willing to pay for their cash to be held in US Treasuries. Why would anyone be willing to pay to have someone else hold their stash? Is this is a sign of folks are so uncertain or have such fear about the future, they will pay someone to hold their money forever. Appetite for risk over long periods of time have been diminished but have we gotten to a point where no one wants any risk no matter the price?

Dear SpikeTrader,Hello from cold and sunny New York. Kerry has been visiting and is just about to fly back to Alabama. We had a very enjoyable campers’ meeting and a year-end party. Most private traders are very isolated, and it feels good and productive to break through this isolation – whether by having campers’ and Spikers’ meetings or by communicating with each other in SpikeTrade.comKerry and I spent a great deal of time during the past few days planning enhancements and improvements for SpikeTrade.com. We are determined to make this the most useful website for serious traders.Let us now turn to the current market situation.

Most market participants have short memories. It seems to me that the memory of an average amateur does not go back farther than two weeks. People expect the recent past to continue, which is why they happily buy near the tops and become very fearful near the lows. The pros have long memories; we know that the danger to longs is greater after a rise and lower after a decline.

I am writing on the flight from Florida where I just finished a week long work session with a client. The weather was not great but a little better than freezing temperatures we had back home. So I will not complain too bad. It was a productive week within more volatile trading sessions of the griping Bear Market. One of the main items we isolated was structure and focus. It is better to be good at one or two things as to be just average when average in this market is not to be down by 50% per the indexes. Without a plan we are not sure what we should do based on the markets actions. My favorite quote is… “It is hard enough to figure out what the markets will do; if you do not know what you will do, the game is lost.”