It has been a long time since I have updated this blog.
It was on this blog that I began to explore development of mechancial systems to trade stocks. Therefore, in the interest of coming full-circle, I want to link to a new system I've developed.
This system trades ETFs only, of the double long and double short variety.
The system has earned a whopping 71.6% this year.
Read about the system here: A New ETF Trading System
I'm sponsoring a year-end contest. Check it out here: Year-End Contest: Guess the Close
Read it here.
ADP Employment Report
Seriously, do yourself a favor and at least scan the first page. The bulls really have something to sink their teeth into.
I am still waiting to see resistance pushed through before considering long positions again.
In case I did not make it obvious enough previously, let me highlight my new blog, which I hope you'll check out over at i Bank Coin.
While I have not updated Trade While Working recently, I have not forgotten this blog. While it is not likely that I'll continue posting a lot of charts here, as that would be double duty, I will continue to post about my trading psychology, some testing of strategies, and what I am trading.
As what I believe is a sellable bounce has progressed, I have bought 6 Jan. expiry puts on the Qs and 2 on the SPY. I also rode AAPL long for over 10 points, but sold it Friday.
Other than that, over the past 2 weeks I've been an observer for the most part, and that has been very rejuvenating for my trading. I'm feeling my confidence return, and I've been able to work on some new strategies and get re-focused. I've accepted the reality that this year will likely be my first to not have double-digit gains. In fact, it would be nice to just do better than break even. Regardless of what I wanted to achieve this year, if I had not taken a break from trading, I would probably be looking at a negative return year over year. I'm not going to revenge trade through the last month of the year, trying to undo 11 months of mistakes.
Today, around 3:20, I realized that the market had an incredibly strong bid developing. I thought to myself that the bulls would probably press the shorts into the close, and that if they were successful, it might set up for some follow-through tomorrow. On Monday I had purchased some SPY and DIA puts, so I closed those out, in addition to my QQQQ puts. I had already covered my EMN and GES shorts this morning.
I also shorted TUP and JOYG when the market reversed. When it reversed again I covered those shorts, ending up with a small profit.
So that leaves me completely in cash except for MVIS.
I am still bearish, but it seems that the bulls are still not ready to capitulate. I want to wait for a bounce and then decide what the next step should be.
My trading over the last couple of days has been more calm and patient, but I am still trading too much. MY GES and EMN shorts are some of the first decent profits I've made in weeks, so maybe things are turning around for me.
Was it a revolt of the peanuts?
Did Danny and Woodshedder join the ranks of the writer's strike?
Did Fly attempt to fire Bilderburg, only to have the rich dude offer him a MRSA laden caviar cracker?
Did an errant laser beam bounce back and effectively destroy the one known as Fly?
The internets want to know...
Well, as you know, MVIS took off without me. Luckily though I had set a buy-stop at $4.15 for 2K shares. Those filled, and I picked up another 1K at 4.22. The fact that it started moving the day after I sold out is just uncanny. The market really can make one question his own existence. Sometimes I think there is a super-computer at Scottrade that sends my trades to others so that they can trade directly against me. Of course, I know that is silly. But sometimes it certainly feels that every move I make is the exact opposite of what I should do.
I have managed to shake off my earlier blues, and have returned to a semi-calm and collected state of mind. What I have realized is that I cannot shake my belief that we are in a period of correction that will likely last for several months. I hesitate to call it a bear market. I feel I must be positioned for it. If I am to be a trader, I have to be able to profit in times when the market is not trending up. Granted, there is nothing wrong with going to cash, sitting on one's hands, etc. But for me, there has to be a marriage between all those elements.
For right now, realizing that I feel strongly that the market is in a downtrend, I must not take on any additional longs. Sure, I bought MVIS. I've also bought ALDN and OXPS. For the latter two trades, I have stops set well below the average daily range, and I will ride these out for better or worse. Consider them a long hedge against my belief that the market will continue correcting.
I have also begun buying puts. I bought 10 Jan 52s for the Qs. I will also be looking for puts on the SPX and the DOW.
I have also shorted GES and EMN. I will continue trolling daily for shorts.
Again, I want to thank everyone that leaves me comments here as they help more than you can imagine. Even contrary opinions are very valuable. Ticonderoga left an opinion that this is a bull market, and he begged me to quit shorting the market. On face value, what he says makes a lot of sense. It forced me to really think about what my knowledge and experience up to this point has prepared me for. After much deliberation, I have to realize that often I am right, but early, and that often I am right, but lose conviction before the trade becomes profitable. If my belief is that the market will trend down for a bit, then I must act and hold to that conviction.
This weekend I hope to dispense with all the ruminations and get back to some charts. Specifically, I want to chart out what the indexes are doing, focusing on my plan for the coming months.
Oh yeah, I'll have Stockalicious updated at some point today with all my recent trades and latest positions.
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