E MINI RESOLUTION OR IS IT?
Now that we have a resolution that is nothing of the kind, check out how our old friend the VIX has reacted recently. It is one thing for commentators to look on and tell us about how we should have been long based on this. Typically these people don't trade so therefore they do not understand the complexity involved in trying to time a mess like this last couple of days in the stock market. It is not a problem for them to make the comments you just have to consider the source.
We were short in Bonds in our trading system there so this development became a home run winner for us when the deal was struck to kick the can down the road, as the bond market plummeted. This was a great way to start the New Year off so thank you Congress!
I do get emails asking whether or not I like a specific signal or not and the answer will always be the same. I have no idea when any signal is any better than any other, not a clue. Trying to judge a signals merits as to whether or not you will or will not do any trade is the art of trading. There is no perfect answer to this and there never will be. If you are trading systems judging the signals is impossible. If you are trading in a discretionary fashion that is another matter. I personally have never been able to determine when to do more contracts, so I don't try, I use the same risk percentage all the time.
I also do not try to trade garbage like what we had go on with stocks the last couple of days. I am not in the guessing business. If I had a legit signal to make a trade I would have done one, but I have no interest in trying to either force one or not take one due to concerns over news stories. I have not spent years developing trading techniques to discard them on a whim due to some random emotion. I think most of you make a big mistake when you sit there and death watch every tick when you are in a trade. Your are just making things so much harder on yourself than you need to. What is the point of knowing where the price is at any time other than when you enter or exit?
I am not going to be very good at responding to emails during the day commenting on trades, I am not watching them. I have my orders in then go about other business typically researching new ideas or other things of interest. I do make some comments on Twitter but that is about it. Michael tends to watch things much more closely than I do, to each his own. It is his comfort zone and it is not mine. The next time you make a mistake due to getting emotional watching a trade move against you, think about how much better off you would have been by not doing so. I think you might find my advice to be worth something in this area. You watching the price move has no influence on where it is going to go.
The chart above was a very tricky instance of where you could have said the VIX said to be a buyer but realistically is that a trade you would really have been comfortable making? Not me. There are a lot of times when it is best not to trade. If you wake up every day determined to be a trading machine each day you are going to part with your money. I would not look at that up move and try to figure out a way to catch the "next one."
It has now been made pretty clear no spending cut backs of any kind are going to happen and the plan is to keep ramping up taxes to bring down the rich which will bring down the whole enchilada. This is fine by me it should make me some good money and just did the last few days. I say have at it ruin the whole thing. The trick was is not going to be easy, is figuring out where to move to. Most places are going to go down with us when it happens. I don't sense it is imminent so no need to start digging your cave out in the mountains yet. Sometimes you get tired of trying to explain to morons that what they are doing is wrong and you have to step back and let them learn for themselves. The only asterisk of course is while you are sitting back figure out a way to make money from their stupidity. That is the fun part.
I am not sure now that we have the two day moonshot behind us what it means for the bigger picture. I still see several weekly setups that are sells and fewer that are buys other than the dollar. This tells me there still are down side possibilities over the near term.
The Tally for December is the two services were as follows:
Bond System -$2,000
Swing System +$2,996
We had our first losing month of the year in December, the system still generated a little over $30,000 for the year even with the losing month of December. We rolled over 3 open trades in the Swing service into January. Full disclosure but I want to down play this so people don't just rush into things. There are some who rushed out of Bonds and including the trade closed out today missed three great wins in a row. This is what always happens it seems so I won't belabor the point. Trading is not for everyone. If you find yourself jumping around from "guru" to guru trying to chase a hot hand, you might want to rethink that strategy. Sometimes a dog chasing his tail actually does catch it but then what does he do once he catches it? It is usually pretty anti-climactic. If you are doing this STOP IT!