Strangely, I have very little to say tonight. Maybe I'm so relieved today was profitable (in sharp contrast to yesterday) that I just want to take a breather.
I did monkey around a bit with the /ES graph over the past several weeks, and I noticed a couple of different things:
The first thing I noticed is that we've had five "surprise lunges" (the most recent of all being Sunday/Monday's, which was huge). After each of these lunges there is a farting-around consolidation period that lasts anywhere from one session to nearly a week. Today marked the first today of our current consolidation session. There doesn't seem to be much rhyme or reason as to the relationship between lunge size and consolidation time-length. It's all news-driven.
The other thing I noticed was that the velocity of the price rise we've seen (which was well in excess of 20% for this rally) has been dying down. Notice the angle of the red lines I've drawn. Although I don't doubt (much) that we'll ultimately get substantially higher in months to come, this particular leg of the countertrend sure seems to be running out of steam.
The troubling thing for me is that I'm a bear market addict. The excitement and quick profits we saw in the autumn were electrifying. Now it's more of a "grind-it-out" tug-of-war between bulls and bears. I have worked very hard to pick a lot of stocks which seem to have the best prospects for strength and a lot of shorts which have the best prospects for weakness. But the most I can hope for, based on that, on any given day, is some fraction of the day's change. If I do things really right, if the market is up1%, I'll be up some portion of that (let's call it 1/2%), and if the market is down 1%, I'll still be up some portion of that (again, let's call it 1/2%).
Of course, I cannot possibly hope to be in the green every day, but if I can manage to make a profit most days (again, a muted profit, since I'm hedged), I'll be in good shape. But picking so many stocks and having a bifurcated portfolio to deal with what we're probably facing over the next six months is a pain in the neck. Oh, well. The market isn't going to pay me for just sitting around. Sometimes it's hard work. This is one of those times.
