I'm very glad I took a vacation, otherwise I may lose more money for being short again. The market is very strong now, Chinese market crash has no impact, bad news is good news for the market. And many shorts think the market may take a short break, so they add shorts recently, get burned again.
- I'll change my trading from now on, to correct my mistakes since March.
- I will trade less, trade small and do more short term trade (like one or two days) until I find my touch again. Many of the puts I added recently was a winner for one or two days. If I sold them, I would not be in such bad position now.
- Recently I wanted to make gain to cover my losses, and then the market went up again, so I lost more. It's a very bad idea.
- Let's try single instead of home run. That's my new trading rule no.1.
- And it's not a shame to lose money in this market, many great traders got burned this time.
- As long as I learned something from the market, it's not waste of time and money.
So what's next?
- I have to trade based on some simple idea. So the question is, what's next for the market?
- If I can answer this right, then I can make some money; if I'm wrong again, I will lose money.
- And money management can reduce the losing amount, which is critical for me.
- I think the market is at an unstable point, that it may break out again for one last 'insane' push with shorts covering their positions; or it may break down significantly. I put these two cases at 45% possibility each. And there is small 10% chance it will trade in a small range.
- Since the market is in such an unstable stage of a late bull run, I think even when it breaks out, it will have sharp drops along the way; even when it breaks down, it will have sharp rallies along the way. So if I trade correctly, then I need to take profit quickly to wait for another better one.
- That's the main trading plan for me.
- The two long positions ONXX (cancer drug) and EMU (bought by another uranium company) did OK today, so these two longs are in winning position. I'll keep a tight stop on them to protect the profit.
- On the puts and shorts, now is time to give them some room, and sell them when there is a break, don't need to make all the money back, just need to get as much as possible.
- My main positions are cash and shorts, I'll keep it this way for now.
2 comments:
Hi, Just trying to help with market timing from folks I've found to be invaluable to consider in your trading plans:
FWIW but a solid timing source:
Intra day timing is looking like down into 10:20(L), sideways, rally 2PM to 3:40 and possible drop to the close (like Monday).
Posted on yahoo group:
http://finance.groups.yahoo.com/group/TimeandCycles/messages
Key up move 6/5 and follow through up on 6/6.
Down hard Thursday 6/7, mild bounce Friday 6/8.
Monday 6/11 up and key top.
Under normal circumstances, markets would head down into 6/15. However it will be options week and depending on how China plays out considering possibility of short squeeze reversal up into the end of the week.
Key highs 6/19 or 6/21, then the fat lady starts singing!
Down hard into 7/6+.
I worked on these dates over weekend before China news broke (and before reading Ian's post). Now possibility of top coming sooner on 6/11 and the follow-ups on 6/19 or 6/21 could be lower highs. Risk clearly greater but I'm going to continue to expect US markets moving up through 6/19-21 until proven wrong.
cheers,
J
http://jpearlquicktrader.blogspot.com/
RajaCar wrote:
> Speculative Path for the June Month:
>
> 1. Rally into 6/5 Major HIGH
> 2. Decline into 6/8-11 LOW
> 3. Rally into 6/20 retest HIGH
> 4. Decline into 7/2 LOW
Major top is this or next week!!!! Major tops aren't usually cliffs, but slow roll over then the down. Look at Feburary mid-month for an example. Roll over is very likely for a month or so, following this week, which may grind slightly higher to Thurs. Everyone is looking for Friday to be down.
Good luck, curt
The AAII data is always puzzling me. The bear is 44% vs. bull 35% as of May 30. Normally the bull needs to be more than 35% for a market top to form. so i guess one more push to record high (e.g. dow 14200, spx 1600) will force a lot of shorts throwing in towels and thus the market top.
Post a Comment