No Man's Land

As we move into the month of December for the stock market, we are basically entering a DMZ or no man's land where the upside and downside stocks are about equal. I took profits in the past couple of weeks on ERX, the 3X oil ETF, and TVIX, the double volatility index. After the recent stock market highs, it is not a good time to buy anything.

I have a limit buy order for TVIX at $38, and I will buy ERX again if it drops to $37. Until the European debt crisis and our own Congressional gridlock problems are resolved, I can't recommend any individual company stocks because the fundamentals don't matter anymore in our current world situation. If we were in a true bull market, it would be worthwhile to buy good companies based on fundamentals of year over year growth and other factors. But this is not the case in 2011, and 2012 may not be any better since it will be a major political year. So, the best course of action is to buy leveraged ETFs when they are low, and sell them when you have gained 20% or more. You will be able to repeat this cycle several times during the next year, and you will make a great profit if you are willing to be patient.