Heading to work- Futures look higher
Allowing stops to do their job SDS $22.20 SKF $51.22
Pleasantly surprised -despite the futures being higher pre market- to find that not only were my stops not hit, both SDS and SKF went further in my direction- approx 1 & 1.5% .
Not a large move, but perhaps enough that I can ease my stop a bit higher- but not too close-
One thing I have learned the hard way- Is the prevailing Trend Rules! Reversals of the prevailing trend have proven to be relatively short lived affairs for the past 5 years- Each time price takes a step further away from my entry, into positive territory, it does not mean I need to jack my stop higher- It gives me the opportunity to react if price suddenly starts to come back towards me.
Despite my present short positions- these are just short term tactical trades - as I believe the market will stabilize soon, and eventually go back to trending higher- but maybe not as smoothly as in the past?
Maybe this develops into the "Stock Picker's Mkt". Maybe we chop around until the new year?
With all of the reasons I hear why US stocks will keep their draw for the world investing community- I also hear that US Equities are pretty fairly valued- and that better buys can be found elsewheres.
This is indeed a global economy now- Islands seldom exist for long on their own-The fortunes of Brazil are seen tied with the growth of China. Austrailia depends on the Far East. The US depends on ????
The rest of the world . Perhaps we are better at Gov't support and financial engineering than Japan was?
I can have a Bias- i just need not act on the Bias- but trade with the chart in front of me.
As this week has seen a continuation of the larger market declining slightly, I am pleased with my rationale to lighten up positions last week.
CURE has dropped from $140 down to 122. I'm certainly glad i sold all when I did-
As prices decline, it will give me a lower potential reentry price from where i sold- This is not only true in the trading account, but also the investment account-
Having reduced my market exposure- I ask myself- Is the greater potential that I will miss out on a 10% market higher move - or a 10% market decline/ I don't like to rely on intuition- but since the present short term trend is in decline- i believe the market decline will occur before the market rally does.
Where this approach fails, is when the pullback is slight, and stocks rebound quickly and exceed the point i sold at- I've been fortunate since August/September - that I've caught some early sells, followed by deeper declines and improved lower cost entrys in a few positions- DTN would be my conservative "poster child" of executing this approach. This will be the 3rd decline where I am positioned to gain additional shares.
In the investment accounts-( Wife & mine) it feels that my reduce position actions were also justified- and timely. Can I replicate this in the future to our benefit? That is one goal that this journal
may suggest is worth pursuing- or Not- It depends solely on the skillset of the operator.
