Usually the right trade is the one you least want to make. Similarly, making trading decisions based on what feels good, or what will make the pain go away the quickest, is usually exactly wrong. That’s why I’m telling you that I’m not buying here.
But before we get into all that, I was going to start this post with about 10 bullets, all of which would highlight my accuracy in calling the turns in this market. Then I realized that it would be a waste of my time to go back through all the posts and pull out those quotes. Besides, those that read me regularly know this anyway. And, I really do not need to rub it in the face of my naysayers (The Fly), as I am not here to make enemies.
So, back to the matter at hand.
You are thinking, “Mr. Woodshedder, I just want to ease my pain! I just want to go long! Give me some stocks to buy! I should have listened to you. Is it too late?”
Well, yes, it is too late, unless you want to buy at the top of a 2 week run, while the indexes are near overbought, and sitting just beneath resistance. Sure, it will make you feel better to have a few longs. I understand. In fact, I succumbed myself to the wanton urges and bought a little [[WB]] today. Tomorrow, I will likely dip into a little [[XHB]]. I may consider some [[FXI]].
However, I’m talking about spending 10-20% of my cash hoard. Nothing major. Like most of you, I too need something to offset a little of my [[SKF]].
The fact of the matter is that there is a good chance that there will be a pullback, or at least stabilization, before the jobs report on Friday. As I stated a while back when I went bullish, bad news will be good news. If the jobs report is just something god-awful, the market may take it for what it is and sell-off. However, if it is just bad, we will probably rally.
Regardless, you’ve already missed a 1000 point run in the Dow Jones. Whats another 100 points or so? If the Dow, Nasdaq, and Spy can rally above resistance, then we will have confirmed double-bottoms, and you will be free to buy with reckless abandon. If the indexes hit resistance, weather the jobs report, and pullback or stabilize on lighter volume, then I will likely be beside you, bidding up equities. Until then, patience is paramount.
One final note. The VIX (chart above) has hit its 200 day moving average. For the last 6 months, as evidenced by the trend, when the VIX hits this level, it has marked a short-term top. A break of this trend should not be ignored.
I appreciate your comments very much, you are one smart guy!
Good post.
PS: In a trading death match with the fly (yes, lower case) I would put my monies on you.
I concede, you have been 99% right on the recent trends.
Well done.
Buylo, thanks.
lol @ mdawsz, and thanks. However, The Fly can ride a trend, relentlessly, much better than me.
Fly- you know, whenever you are serious, it makes me nervous. My expression, when I read your comment, is not unlike the look on a dog’s face when its master, who has beat it senseless in the past, suddenly offers it a kind gesture. The worst part is that I have the distinct feeling that a Fly concession is the kiss of death. I will now proceed to be 99% wrong. The irony of it is that your YTD is likely 4x mine.
Untrue, unless you have been scolding hot in your actual trading.
You haven’t given many updates on your actual trading performance.
From experience, whenever I am on fire and cannot be stopped, leaving fuckers like Mdawz in my path as roadkill, I like to take an opposite trade—knowing that I am overdue to be wrong.
Thus far, this year, I have not knocked the cover off the ball on any one particular stock or ETF. Instead, I’ve had a series of successful leveraged trades.
However, my directional bias, to the downside, has been consistent and is due to be tested. I’ve concluded to avoid trying to “out trade” the market is my best path, since I have access to vast amounts of capital, unlike Mdawz.
I believe the market will be lower than where it is today, within 3 months—for sure.
I will deal with the occasional blips accordingly.
Wood,
Agreed, the index has run too far, too fast, we’ll see a correction over the course of this week, quite possibly starting tomorrow.
However, the general trend, in the shorter term is heading back to circa $144 on the SPY.
jog
Ducati is bullish. Now I know it makes sense to stay short.
Your humility, it serves you well.
A word on FXI — “go long” if your feelings tell you.
Of this, however, best to keep in mind it is:
To Richmond I will come, my brother and niece to visit.
A side trip I will make, your nuts I will kick.
Fly,
Obviously reading comprehension was not a strong subject for you at school.
I agreed with Wood, that the very short-term, viz, the next two days are bearish, once again, however, in the medium short-term, say one week, we are bullish.
jog
Excellent comments Fly.
I have been considering setting up another public portfolio widget for the blog so that everyone can see what I’m doing. However, I’m sort of feeling that it will fuck with my psychology.
As for my performance, I’ve been trading very well, but I have stayed very small. The account has hovered within 2% or so around a 6% YTD gain for the last two months. My plan for this year was to not get very long until the indexes regain the 50 day. This has happened, and so I will be getting more aggressive, both on the long and short side.
While I have been extremely successful in my directional trades, I have not traded in any real size. While I miss the days when the account would move 3-5% in a day, it has allowed me to focus on developing strategies, and build up my confidence, while being able to take an objective view on things. The goal is now to incorporate more size, with strategies, while maintaining objectivity.
Yoda,
If I find out that you come to Richmond and do not give me a chance to buy you and your kin a few rounds of good beer, I will cut off your small, green marbles, with my son’s old, broken, plastic light saber.
Since when is “medium term” one week?
Where the fuck do you trade, in DT’s v/o.
Oh yeah, you do.
Look you, quit your high brow routine. It’s somewhat gay.
Viz.
Nice post Wood!
A malty beverage with you, I will contemplate.
In need of his “marbles,” Yoda is.
The gathering site of his “midachlorians,” they are.
hey wood,
Take a quick look at CRDC. To me, it looks ready to break out. It started an uptrend in early march. It broke through it’s 3 month downtrend. Approaching a break of the six month downtrend. Approaching the 50 and 200 day MA, which are about in the same place.
Am I accurate with this at all? This is a long term hold for me, but I might add some more today
oh yeah. Please, thanks