Why be in cash now?

Quote from mister_doodi:

I took profits on MSFT and AXP on my long term portfolio on Friday because I think we are at a short term turning point in the market that every one has been expecting.

I'm 33% cash now and looking to buy use all the free cash up at around Dow 7400. Thats around 50% retracement of the current run. Also, it would set up a head and shoulders scenario. I hate to use technical analysis in this current economy but that's about the only thing making sense right now.
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I have been scaling out of my "long term longs" as well. However, I'm looking to fully deploy my cash when we get below SPX 700...
 
Yeah I don't know about "conservative daytrader" but I do agree that being partly or fully in cash isn't necessarily such a bad idea right now. Things are very crazy.
 
Today was brutal for me. I kept trading for the pullback. Anyone have a recommendation of a trading rule when to stop countertrending the market? And when it finally did pull back I was too emotionally drained to participate.
 
Quote from foreverstudent:

Today was brutal for me. I kept trading for the pullback. Anyone have a recommendation of a trading rule when to stop countertrending the market? And when it finally did pull back I was too emotionally drained to participate.
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Obviously, any iron clad recommendation on such would be worth a buck or three. A fairly good rule of thumb on trends is to buy the pullbacks on up days and sell the rallys on down days. The trick is to determine the trend early enough and take your profits before it turns. On that, seems best to trade some and hold some so you are guaranteeing some profit but holding some for the big moves and having a trailing stop to preserve profit/limit loss on the remaining position.

to actually answer your question, i generally don't countertrend the market on purpose but whenever i get into any position, i have a stop in mind determined by the volatility, ATR, etc. of whatever stock/ETF/futures contract i am trading that if it moves against me by that amount, in your case, a continuation of the trend, then i am out. then, of course, it turns as soon as i stop myself out;-)

hope this helps
 
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