Balance Thrice Sought

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I've never tried meditation, but the closest I probably come is weekends like this one, when my mind is deeply focused on how to position myself for the market.

During much of May, the market was behaving in the kind of way where the effort required for me to profit was pretty small. It was my kind of market, in which my only real task was to seek out yet more opportunities and gently adjust the stops on existing ones (almost all – and sometimes entirely – short positions). There was, as you may recall, a ten-day winning streak of fat profits I got to enjoy. My kind of life!

Last week – particularly Thursday – put an end to all of that. The evidence that the bear party is yet again put on hold has piled up. Some of the evidence is technical. Some of the evidence is anecdotal (such as the level of Kooky Kommentary I've been noticing on my own blog, some of which is perhaps comprehensible only to its own writer). And prognostications about highly conjectural earth-shifting events on other unnamed blogs probably should serve as a bit of a tip-off.

There is no way on this earth I intend to undergo the kind of stomach-churning draw-down I went through from February 5 to the end of April while awaiting for good sense to return to the market. Good sense doesn't matter; cycles do. June 10 stunk, and on June 11 I began making adjustments by adding bullish positions to my portfolio.

I don't intend to go "all bull", but I do intend to push for a market-neutral (at least by my own measurements) portfolio to ride out what I think could be a five-hundred-plus push higher on the Dow's part. I've already picked out thirty charts I find attractive for purchase on Monday. They fall into three categories:

The New High

There aren't many of these in my list, but these are the "obvious" buys – – stocks which, in the face of a weak market, have continued to show Herculean strength. They have very clean stops are pretty much everything going for them if the market in general shows more power.

0613-regular

The Sputter

These charts are on the lower end of some kind of oscillating pattern. Their stops are not far away, but they've got lots of room to run. I imagine they will sputter out around the same time the general market does.

0613-sputter

Hemmed-In

This is my favorite, since I consider it my canary in the coal mine. In these cases, I don't see the price getting anywhere past the tinted area. As these stocks approach their respective resistance levels, I think the market will be ready for its big turn down.

0613-hemmed

I don't relish the thought of returning to a "50/50" portfolio, since it eliminates the prospect of the kind of big profit days I enjoyed in May. At best, it'll mean a small profit is eeked out, irrespective of the market's direction. That's the price I am willing to pay for my lack of certitude about where the market is going.

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