NOT MUCH NEW
I am still looking at Bonds as a potential sell. I could have been short on the huge gap down after the holiday, but it caught me off guard to be honest. Also, my short term tools were not clear at that open, so if it just goes from here I miss it. I have diagrammed what would get me into this trade if it were to happen. If the equity decline I am looking for begins, we may have a shot at this. The one large picture problem I see with any long term hold type of thing on a short in Bonds is the Japan like path we are following where we could have artificially low rates for a very long period of time due to the economic malaise we are experiencing. This is why shorts are most likely short term trades, but we never know that coming in we just have to take what comes along and hope for the best.
I have to admit that I am having a hard time finding a lot to trade right at the moment. I have mentioned the trades I am looking at in prior posts, and there is nothing new. The stock trade in CPT was exited today for a profit, while all along it appeared to be heading for a loss. As a result, there are still no losses in that new methodology yet. I front ran the exit today, getting out at 60.79. I state this over and over, but once again, I trade with discretion. The rules called for an exit on any close below 61.73, so I knew today was most likely going to be the exit day. I had been sitting in this trade out of the money for several days, and my patience was wearing thin. When the ES moved down sharply, it moved into a buy zone on a day trade basis, so I expected most stocks to bounce with it. I decided that it was best to not leave the last few hours to chance, when it was not likely the stock market was really going to roll over. I covered the short into the sharp selling and wound up getting out at 60.79. This was lucky since it was 3 ticks off the low of the day. However, my logic was sound and I made a bit more than I would have had I held it to the close.
I will always trade with some judgement calls like this. By the rules the exit was at 60.95 which was a gain of .17 per share. This trade was lousy to be honest, but it still did make a profit further enhancing the validity of my new system. It now has still not had a single loss. The 3 trades I mentioned today, had 2 that just went straight down right from the open, so the orders were not filled resting at yesterday's close. The third one, SHAW was, so that trade is on. The exit will be tomorrow on any close <= 26.99. The rules I have developed actually call for just entering at the opening, so I should have technically been in the other two. It was another judgement call to have the entries as limit orders at the prior close. I missed one by just two cents. Oh well, I will never get them all correct.
This does illustrate one tough reality for me. The use of stops does diminish performance with systematic methods. This trade intra-day went quite a bit against me yesterday. However, when you have a sound fundamental setup, you need to give things some room and let the noise not ruin your day. I never for a moment considered exiting this trade up there. The key is position size. You have to select manageable size positions relative to your equity so that no individual trade makes or breaks you. There is nothing else left to say about this one. Now we watch SHAW live to see where that leads me.
I am running into some legal snags on what I am considering for my web site. Any liberals reading can thank there blessed belief in regulate, regulate, regulate. These regulations are likely to cause me to kiss the whole idea good bye. I just don't want to be under Uncle Sam's thumb night and day. They have ramped things up quite a bit, and I don't want to become a CTA again. As I get more popular they may even come after what I talk about in here. I have seen them surfing my site here and there on reports I run. I guess for now the whole thing is off until further notice. Thank Uncle Sam if you were looking forward to any of it.
I will not spend hundreds of thousands of dollars defending a blog that makes me no money. Let's hope they let me be and don't start chiming in about all the disclaimers I don't have. I will never forget the first time I registered as a CTA at the end of a year. I had not even thought about where I was going with it or made any decisions at all about how to raise money etc. All of the sudden I had the NFA screaming that they had to audit me! I kept telling them I had no clients. They wanted to come sit with me for 5 straight days. It was only when I told them I would not sit here and they were on their own with my dogs, one of whom was not friendly to strangers and weighed 190 lbs, that they finally said, "we have decided that it might be best to conduct the audit at another time." They never admitted how silly it was that they were demanding to audit records of someone who did not have any clients. I think the only way I will return to that scenario is if a large firm who paid for everything hired me to run a fund for them. That is a longshot and it would take one hell of a salary guarantee, so it will never happen.
The funny part was they thought I was kidding about the dog, I wasn't.
For now I am still looking at some type of stock market sideways to down movement to begin in the next week or so that should last until about March.