216 replies to this topic

[lawdog]

added 10% more at close, up to 65% plus silver. Rough day. Had worse.

[lawdog]

what do I do in a panic? I buy. 

[lawdog]

Added a little to my positions but still less than 70%. 

 

Trading markets is very strange: I'm more bothered by my silver call being wrong than by the nice bounce in qld and sso. If we can get back to 2400 spx, I have calculated it would have given me about 6/10th's of one percent roi as a result of the plunge, but we still need to get there. Would have been nice to do better yesterday, but that's the way it goes.  A missed opportunity is always missed, but once it's gone, you just have to find your next opportunity. Someday , probably sooner rather than later, these recoveries will stop and the bears will catch a break. I mentioned in one of my recent posts that bears pretty much need to take their profits quickly because they don't last long. Not criticizing bears, just saying how hard it has been in the last 15 months if you are trading that side, which I have done a little bit, as recorded in these pages.

[lawdog]

Glad silver is doing better, not that it makes a lot of difference in my account. It's just one of those side trades we often make when we think something looks inviting.

 

On Wednesday in the last hour, I could see it sinking and when it crossed -28 on spx, I figured it would likely get to near -40 (it actually finished -43). So I didn't want to sit around with my 55% position and watch it drop another 10-15 pts, so I closed my eyes and sold down to 35% but the market dropped so quickly, I think I got out at -33. So then as the market got down -37 I added back 10%, then 10% more at -41 and then 10% more at the close at -43. I knew I wanted to be long and figured if I liked it at 2400, why not below 2360. But the game goes on and every hour you have to decide where you want to be.

 

My active trading account is back at its prior high balance even though the spx is 17 points lower than its close on Monday. So that's encouraging. My accounts that I did not trade, or traded very little, in the one-day debacle, will not be fully recovered until the naz100 and spx reach near old highs; hope that can happen and more. 

 

In the past year, the January 2016 swoon, the Brexit decline and the pre-election weakness all were helpful in adding to performance. The point is, something goes against you, you don't give up, you work at it and can usually make something okay out of it. My regret from Wednesday is that I should have recognized that the opening bounce from -20 to -16 that didn't hold and saw the market at its lows at the end of the first hour was likely going to be a trend day and I should have reduced my positions earlier than I did. (Again, hats off to Minyanville for that trading rule which is very helpful.) We have all seen days like that unfold, and they have a pretty strong pattern that often repeats. I made a few quickie trades against trend but why not a few all day trades with trend? Anyway, just something to remember next time. I made the same mistake in the opposite direction on the March 1 jump when the spx first crossed 2400. The difficulty is that when you get caught with a gap against you, you resist accepting the loss from the gap and stubbornly hold on and get hurt as the market trends further in the direction of the gap. If I could eliminate this trading error it would probably add 3-5% of performance a year. Maybe I am expecting too much.

 

Expiration week always leaves me a little bit rudderless, but it seems this decline may be what we needed to refresh the markets to allow spx to get to 2430 or even as high as 2475. In any event, must remain vigilant. I have about 70% of full position so I have put a sell stop in for 10% just in case the spx drops back to 2375. Doesn't mean I have lost faith in the advance; just being cautious. I am more comfortable right now with 55%, but am glad I have the 70%, but don't want to give it back and compound a mistake by having a larger position than I had on the way up. Almost certain to cut back to 55-60% for the weekend even if my sell stop is not taken before the close. When markets are trending, sell stops have really helped me get a little more performance when I am nervous about the size of a position. I put today's sell stop in when the spx was up 12; now it is up 20, so that so far has given me a boost instead of getting out of that portion at +12. 

[Rich C]

I was a buyer yesterday and today.  BAC, JPM, CVX, MSFT, sold an AMZN 900 put in the selloff Wed.  Bought some SPY when I ran out of ideas and wanted in quickly.  Have a lot of powder dry, will see what we look like on Monday. 

Edited by Rich C, 19 May 2017 - 12:55 PM.

[lawdog]

Hello Rich, Hope those work out for you; i imagine you have already done well with the amzn put sold. 

 

I still have 30% powder remaining; think I will keep it that way. One trading mistake I have made is to have modest positions in the direction of the move, and then when the move has gone on, increase my position, only to see the market turn on me, so I not only lose  what I made, but more, because I added to the position at the turning point. So if a market gets past me with a smaller position, I will not add to the position if it has already gone on for some time. 

[lawdog]

I find it interesting that I get about 1200 hits a week on this thread. I really wonder what the viewers' motivation is. I hope it's positive and that it provides people with something helpful and that people are not just tuning in enjoying seeing me get whacked by the market periodically. But if it provides entertainment for some and for others some help in analyzing their own trading, I guess it is worth it. My motivation is that it is a form of discipline. by stating what I am doing, I focus, and I am more inclined to critique my performance, recognizing the good and the bad and, I hope, improving my trading. Even if no one tunes in, it's at least helpful for me.

[lawdog]

Lots of put buying here near the end of the week. May be a positive. Mkt just hit an air pocket but still about 6 points from my sell stop. But either way, I'm going to reduce my position from 70 to 60% by the close.

[lawdog]

sold down to 60%. Probably hold there over the weekend.

[Rich C]

One trading mistake I have made is to have modest positions in the direction of the move, and then when the move has gone on, increase my position, only to see the market turn on me, so I not only lose  what I made, but more, because I added to the position at the turning point. So if a market gets past me with a smaller position, I will not add to the position if it has already gone on for some time. 

 

I have been there and done that also.  OTOH, I have sat and watched an extended move and not gotten in at all, leaving a lot on the table.  The key is probably the last 3 words of your post, "for some time".  If you wait too long, you could be stepping into the next wave and caught in the downdraft, as you say.  I'll probably give myself 3 days, Fri, Mon, Tue, and then sit tight.