SOMETHING INTERESTING HAPPENED ON FRIDAY
In spite of the good sized up close in the Dow Friday, all 5 of my stock shorts closed down for the day. This was really a surprise when I checked in on them. I do not know if that means anything at all other than possibly I have chosen some of the ones that are a bit weaker than the indexes. I do wish my method was not picking all of these sells right now with how strong the indexes are, but when I test this new method adding premises about the market averages, the results deteriorate across the board. As a result, as much as I am not a huge fan of trying to fade strength like this when it is with the trend, I am going with what the method says to do. This is what we all have to do. There is no point in spending countless hours studying and developing methods, just to kick them to the curb the first time you get into some trouble on a trade. All methods have losses.
When we look at the weekly chart now of the stock market via the ES we see what I consider now to be a changed picture.
Maybe I am late too the dance, it appears so. In any event, now in my world the trend on the weekly is up, so it is buy the dips. Once we get these gaps above my bands, I consider those to be enough to confirm a change of trend. This does not mean we are not still short term oversold, we are by any number of measures especially the VIX. The change for me now is that I will be looking to get aggressively long into the next pullback. As I mentioned in my last post, a few very good traders I know are expecting a huge bull market this year, and it is starting to appear they may be right. Ideally we would dip far enough to get to the lower band to generate the next buy signal. We could be early in this new trend, however that does not matter. My rules say we are in an uptrend now, so I will be watching for short term tools to tell me when to get long.
Now that everything is hunky dory, maybe one of the classic laggards that I have been mentioning I was bullish in, the EURO, will make it's move.
You can see my new indicator went into the buy zone right at the lows. My other tools I use to enter trades have not set up properly yet to buy this, but I am hoping they will if we dip as indicated. This is still a pretty big downtrend, so I am not going to chase this one here, I will wait.
I missed the Bond short I was talking about, what can I say hopefully some of the readers caught it. We just rose too far for my indicators to stay in the sell zone, so I did not have any short term entries. The Stock Market has just gone up farther than what I thought, so it follows that I missed this also since they are inversely correlated.
This has been a really nice move, had I been in this I likely would have taken profits at the close on Friday, after these 3 big down days in a row. However, I cannot say for sure since I did not make the trade. I am still short in the Soy complex, specifically Bean Oil. I showed this one the other day, now I think I will have to get out if Friday's high gets taken out. We did have a continuation entry on Friday when Thursday's low got taken out, so if that were to fail, I will have to exit the original from the higher levels. I did not take the add on entry since I was already short.
There really is not much more to do here other than just place the orders and see what happens. Wheat, Corn, and Meal have gotten much stronger, so we might be putting in lows in the Grain markets down here.
I am still grinding in a few stock trades as I mentioned, the CTAS was the one I officially discussed here live. It looks now like the exit is any close under 37.75. The fact that all my stock shorts declined Friday while the Dow rose, tells me that day was a little weaker internally than what the averages showed. Maybe that means we are approaching the short term correction I have been looking for. I really have no statistics on that it is merely an observation. I continue to work with this stock trading method, and have found a few things that will improve it. At this point there still is not a closed out losing trade, so it is not exactly a disaster. There are a couple current ones though including CTAS, that do appear destined to be losses by the time they are exited.
According to my new friends comment, I am an attention whore, so...........
Attention Whore Out!