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As I wrote on Christmas Eve, my plan was to ride out the last four trading days of the year without any positions. It’s been pretty agonizing, because I am dying to get very aggressively positioned, and in spite of the market’s surge lately, a lot of my best short picks are falling to pieces. All the same, I am gritting my teeth and counting the hours until this year is over. Just two days to go.
The Dow Composite is still tracing out a series of lower highs.
It’s a little early, I suppose, to be doing any kind of “end-of-year wrap-up” kind of post, but frankly, I don’t have anything new to say about the market, and I might as well share the one semi-pithy reflection I’ve got about 2015 at the moment.
My two errors this year actually contradict one another. My first error was not holding on to positions long enough. My other error was holding on to them for too long.
To address the first error: as some readers may recall, I made a post back in November 2014 called Shifting Sands which, even at the time I marked as a “Best of Slope” post since I considered it so important. My basic thesis was that oil producers were going to be wrecked, just like gold miners had. As I wrote, “I am inclined toward individual energy-related shorts, because I think they’re going to suffer the same gruesome fate as precious metals miners have”
“All of us show bias when it comes to what information we take in. We typically focus on anything that agrees with the outcome we want.” – Noreena Hertz
I have been wanting to write this article for some time now this year. I wanted to wait until the results I was attempting to achieve became overwhelming. I think we’re there, so I am eager to share. Before I do, let me take a step back and share briefly my history as a trader and investor. I would divide my investing & trading history into three segments.
1998-2007 – Long term investor. Buying and holding assets.
2007-2014 – Combination of buying long term investments & discretionary trading
2015 – Combination of buying long term investments & ATR based trading
I graduated from college in 1998, began working, and investing. My focus was accumulating capital, and putting it to work buying companies that I believed in, understood, had good balance sheets, and for the most part paid dividends. It worked. I enjoyed it. I was good at it. At this point in my life my expertise was understanding companies, not the global economy, or technical analysis. My father was an executive, and my brother was an entrepreneur. I had grown up in business, and been educated in the management of companies.
Well that post title got your attention, didn’t it? But I’m serious. At least temporarily. Here, allow me to explain.
I have decided that, before the end of the year, I am going to completely exit the market and be completely in cash. This, for me, is unprecedented, as well as somewhat discomforting. There are several reasons I’m doing this: (more…)
I can’t get too excited about possible market follow-through in any one direction on the S&P 500 Index unless and until price breaks and holds either above 150 or below 100 on the SPX:VIX Daily ratio chart below.
Currently, price is still in what I call the “Major Conflict Zone.” Yes, I realize it’s a huge range, but that’s the way 2015 has gone. In my opinion, I think 2016 will see greater volatility and much larger swings than we’ve seen this year…hang onto your (Santa) hats, folks!
