Slope of Hope Blog Posts
Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.
This is one of those "got to get this off my chest" type posts.
I cannot help but feel very disappointed in today's action. It's not so much that the market isn't doing what I'd like it to do – – that's something none of us can ever control – – it's the fact that the way this market is behaving is rewarding rule-breaking and punishing rule-following.
One of the most basic rules is to let profits run. You don't close out positions the same day you open them just because you happen to have a small profit. You let them run, updating the stops along the way, and hope that they will blossom into big winners.
Well, that's what I try to do, and it's not working. What we're going through today is a perfect example of this. Yesterday the market fell nicely, and I had a handsomely-profitable day. Now that the Summit is done, it seemed that things were in line for a continuation of a soft market. Irrespective of one's views of what the market was going to do today, the fact is that there was no logical reason to scurry around just before the close and shut down all my positions just to take profits.
But that is precisely what I wish I would have done, simply because the market is rocketing higher today. It seems that we're on an endless cycle of up/down/up/down/up/down/up, and it's enough to break one's spirit. After all, if we can't manage to hold on to gains for more than a day, what's the point of any of this?
I took some profits on some of my riskier positions earlier today, and I've bought a big block of DIA (and shorted a medium-sized TLT) to help balance things out. But this market is exhausting, I've got to tell you, and as much as I'd love to pretend to wallow around in the joy of trading every single day, I'm frankly getting awfully tired of this. I imagine some of you are, too, and I wanted you to know you're not alone.
I'm somewhat surprised by the strength that we've seen so far in the market today. Europe appears to be on the verge of implosion, and we're rallying like there's nothing to be worried about (denial? short-covering?). I'm still long on SCO (oil 2x short), and will likely bail on it, if oil can push above $99, as that has been the source of a lot of intraday resistance.
Below, continuing on my post from yesterday, I'm providing you with three more short setups that have a lot of appeal to me if this market can turn the corner and begin heading south again.
Every evening I publish an outlook for the next day's trading in the SPY ETF … it looks at important levels and potential patterns. Then on the following morning, I update the outlook with a tighter focus on the pre-market action and the specific Control Bar Values and other support/resistance areas.
I suggest that this exercise makes me a more prepared trader and I would suggest ALL active traders perform a similar exercise. For illustration purposes I will combine last night's report with the pre-market update that I just published.