Don't try to figure this market out...

Watching and participating in the market over the last few weeks, one thing has become exceptionally clear; there is no clarity.

I've pulled three straight great trades (Lear +52.3%, Citigroup +57.25% and Bank of America +15.83%), I'm up roughly 13.5% on all buy & sell trades since I started trading in December, and my holdings of GE and Manitowoc Co. have been moving around their break even points, yet I still don't feel too confident in the market, nor do I have any real gameplan moving forward.

The best thing I've found to do so far is to follow the old adage "buy on the rumor, sell on the news". This has worked especially well on companies the government is subsidizing through loans and bailout, but you need to be careful because things can turn on a dime. A perfect example of this just happened with Bank of America. As I outlined in posts to the topic "Paul Woodcreek's Personal Portfolio" (http://11bagger.blogspot.com/2009/01/paul-woodcreeks-personal-portfolio.html), I chose to buy BAC because the government wasn't going to let it fail, the CEO hinted at big profits, and the price was low. I bought at $7.6482/share on 4/3 and rode it up to $11.58/share on 4/14. This is where things stood six days before they were to announce earnings. If nothing else, I figured it would slowly climb upwards until earnings were released... I was wrong. As of Friday (the last trading day before earnings were released), the stock saw a high of $11.23/share. I decided to hold through the weekend in hopes BAC would beat the estimates of $0.04/share. When I saw the earnings come in at $0.44/share, roughly 9x expectations, I figured this stock would skyrocket. Looking at pre-market numbers today, the stock was down about 8% and was at a point that my $1 trailing stop would have sold me out of the stock on open had I not changed it. So, I figured I'd widen my margin to $1.50 and see what the day held for me. BAC dropped like a rock... my trailing stop sold me out before 10:30AM!

When the dust settled, I still netted 15.83%, but I also left about $2.50/share of profits uncollected (DOH!). BAC ended up closing the day at $8.02/share, down 24.34%. This on a day where they blew away earnings estimates. I don't understand it, but I'm happy to take my profits and move on. I'd urge all of you to do the same... when profits are there to be taken, don't get greedy, just take them. This market is irrational and dangerous, even if you're right on top of things and try to use common sense.