In the last two posts I laid out an idea that animal spirits could get excited enough to play deaf to a multitude of macroeconomic pressures and start a bull run. After yesterday I felt today could be the day for an S&P close over 1230 and more on the way. Nope.
I opened up two positions this morning in the stocks TX and CVLT. TX had made a screen I used in the iBankcoin PPT (along with BRO which went much higher yesterday) and if things took off I figured that would as well. I picked CVLT because this stock leads the Nasdaq by a bit and would be my tell if things were turning south.
After a down open things came back up a bit. By 11am CVLT started flashing me warning signs and I closed it out down 1.2% and later on walked up my stop loss on TX and was closed out at about the same loss.
The point of this post is not to go over what news or what may have caused a sell off. When trading short term not much of that will matter. What matters is I had a clear goal here and a clear exit:
-If S&P closes over 1230 I would already be in two names I like for a run up
-If S&P loses 1220 I would exit no matter what
I stuck to the plan. Until things change and stay changed for a while this market is dangerous and should be treated as such.
That said, at some point things will change. I wanted to be open to the idea that a new leg higher was starting, but I was not hoping for one. I did not need a leg higher but I positioned if one was coming with strict risk control. That's all you can do.
Writer Eli Radke (who is very sharp, stop on by his site at the next link) wrote a great post the other night and in it he said:
"When you lose “too much” , you probably have not stopped losing."
Chasing old losses or hoping for something to happen will not work out. The worst in my mind is needing something to happen in markets. That is the most dangerous mindset to have.
Anyways, that's what I did today as far as market work. As things stand it's more wait and see. Patience is still the only commodity that is rising in value right now. Ticker for the patience futures is PAYSHINZ_F.
Have a good night.