2 replies to this topic

[Sentient Being]

SPY made an open and close today right at the top of the up-trending channel. I'm changing my game plan. I fully expect a significant pull back over the next four trading days.


I'm splitting the stop between two positions. One very close as if this was a swing trade and I expect it to roll over. I'm in at 146.15 and I'm going to stop half out at 152.50. That's a 4.3% gain if I'm stopped out. With the second half I'm going to drop the stop back far enough to make a little but to withstand a fairly strong correction and still run with what I hope is an up-trending market. Probably about 147.39


So I'm squeezing some profit just in case this is it and hanging on with some deeper down in case the trend might continue after a pull back.

In the chart below you can see my concern, SPY has spiked up, formed an ugly candle, right up against the trend line. I might even look for a buying opportunity near the bottom of the channel.

Edited by Sentient Being, 19 September 2007 - 05:31 PM.

[Islander]

You are right.The index is at resistance; a turn down soon is possible, maybe probable. Why not hedge your longs with some SPX puts? I would favor some SDS as a hedge over selling a position that might a core position in your plan. I trade in support of core positions which I hedge against short term swings. My record is not perfect, but about 60% of the time I am able preserve/add to a core position with judicious hedges. Did you look at the A/D today? seems pretty healthy, but Support and resistence is my ST trading guide so I agree with your caution. Best to you. Islander.

[Sentient Being]

Trading in Ira's with no tax consequences. Have never delved into the world of puts and calls. My best guess is that intermediate term is now up, even though we may be due for some downside here for a few trading days.