Stocks reversed today, across the board, unfortunately volume fell with it. That is the opposite of what you want to see. Yesterday volume rose, markets fell; today volume fell, markets rose. The market was very volatile today going higher, lower, then making a push higher. All of this recent action in the indexes, along with all of the individual stocks BLOWING UP resolves my faith that staying heavy cash is the correct play right now.
Charts have turned choppy, ugly, and down right negative during the past two weeks and today they did not get any better. With fundamentals being the best we have seen in corporate history it reminds me of a history lesson: Technicals and Fundamentals tell you when it is time to buy, Technicals ONLY tell you when it is time to sell. Why? The fundamentals and story is always the best AT the top. Only in hindsight will you know that the earnings were going to top then.
New Swing Longs: CVCO ASEI EPAY ACR KNOT
Also a lot of individual gold charts look great here. Some are a buy now some need pullbacks or more time basing: RGLD GG GLG LIHRY ASA CDE EGO NTO VGZ AUY MNG ASA KGC SLW JRCC GOLD. Keep an eye on the Gold sector; it looks primed and ready to go on a move.
Longs Outperforming Market: BCON INFA PRLS ANX
New Swing Shorts: NAHC EAT VLI RARE TNE
On The Radar Screen: INT WEX
Disaster DeJours past two days: MED DATA. Nothing I could do about DATA, I took my 16% loss from my 7/15 buy. Another reminder why I diversify so much in my accounts with many great looking charts. MED on the other hand shows the importance of cutting all of your loss when the stock closes below the open of the day of the breakout. By cutting my loss by the close after the nasty intraday reversal I took a loss--almost 9% but remember this is on a small portion of my account and risk/reward was there 4/1--but saved myself a total gutting by losing 35% or more on the trade.
Not too many people will talk about their mistakes in the market. I do because I think it is a very healthy and important thing to review BIG mistakes, instead of just talking about all of your BCONs.
The stock market is like poker. Everyone thinks it is easy to enter the WSOP and win 7.5 million dollars. But if you are like me, you will enter over 500-1000 tournaments just to make one final table. What does that have to do with the market? A lot. The psychological strength it takes to continue to battle on has to be enormous to deal with all the bad beats. The same thing applies to the stock market. It takes a lot of time and hard work to consistently make money. Anybody that thought the market was easy and started to buy stocks the past week now understands how complicated and rough the going can be. There are going to be a lot of bad beats in the market but if you are confident and continue to play and study the market you will too make that final table and grab a piece of that 7.5 million dollars.
That doesnt say much about my poker game, btw, losing so many tourneys but if you ever want to meet me in Vegas and go Heads-up or play a ring-game I welcome the challenge. :-) j
ALOHA from Maui
3 comments:
Every investors looses money every year on some type of trade. Its good to see a serious trader actually talking about his.
Thank you, Vince.
I believe it is not only extremely important to acknowledge your mistakes but it is more important to learn a lesson from them.
Hopefully, that way, we will not repeat them. However, I seem to be able to repeat them more than I want. That tells me there are just some things you can do nothing about.
If that is the case, you better make sure you are thick-skinned and can handle to really bad along with the good.
correction: ...and can handle the really bad times along with the good times.
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