The War Effect

Two dates come to mind. January 17th 1991 and March 20th 2003.

The initial effort to oust Iraqi forces from Kuwait began with aerial bombardment on January 17th 1991. SPY (S&P500 Exchange Traded Fund) started moving up from a value of 31.52 on January 17th 1991 to 41.94 in a year; a 30+% gain.

The Iraq war began on March 20th 2003. SPY moved from a value of 87.56 on March 20th 2003, to 111.82 in a year. That was another 30+% gain in a year.

Could there be a war effect on the stock market that makes it jump so?

The Libyan war started with aerial bombardment 0n 3/21/11. I cannot help but notice that the announcement of the UN resolution on Friday certainly triggered an upside move that was strong. Yet I feel the volume was not quite there on a cloudy note. So what do we do and what does this mean? Where will SPY be in a year from now? Will there be another war effect?

I think that there is a strong upside potential possible with the stock market with the war effect. I will watch for trigger signals to participate in the up move and not be afraid to take the risk of sitting out and losing the gain possible. The trading system that I use on SPY is good, very good; but it is not infallible. I will be watching my charts closely to define these triggers, independent of my trading system, and when I see them crossed, I will pull my trigger. Hopefully my expert intelligent system on SPY will provide an up signal as well; but even if it does not; if my triggers are crossed I will participate. But I must not trade emotionally and if I jump in I should have an exit plan. That exit plan should be known at the point of entry. If the war effect is real and positive I could see my portfolio grow. And if it is not, I should be willing to accept that and follow my systems and signals and exit when I need to..