Simplification

It's been several years of trading for me, and not a good winning streak over the whole time. So I asked myself what worked and what didn't. I found the time I lost the most was when I allowed a position to lose and keep hoping it would bounce back. I could have cut my losses half the time, and win bigger the other half and still be happy.

So after stepping back, it's time to simplify. There are several things I know - stocks trend. It's observable when you look at any time scale with enough data points. So the key must be to identify the points where a trend reversal occurs, and drop out if you're wrong. The biggest problem is it's very hard to tell how long the trend will last. But if I follow my expectations, I'll know when to get out most of the time.

I do believe in candle charts. I don't believe in the accuracy of candle signals. It goes along with simplification. If you're trying to read too far into something, you're probably not seeing the forest through the trees. So after all this talk of simplification, I must have some simplified trading rules in mind. I do. But that is for the next set of thoughts.

I think it's funny that my inbox is now filling with loads of beware beware. The truth is nobody knows what the future holds. A few things are certain - A down trend has been established, and that trend is not necessarily continuing. In fact, the last several days have gone towards a more bullish trend. For this reason I think a calendar spread really makes sense right now.

Nix that Stabilization

3 days of stabilization have led to a point that is once again unsure of where the market is headed. This time I jump over to the Dow for another look at things. IWM and SPY all reflect the same struggle to find a trend for this market. That really makes me concerned about upward price movement - it's failed a few times. But things just aren't ready to confirm a slide yet. But when I look at the indicators sudden movement, it spells out some bad signs for the bulls.

Not yet

Signs showed stabilization today; although it was enough for me to exit a bearish position, I need some more confirmation to run with the bulls.

Nothing but Trouble

After feeling out a bearish positin 2 days ago, I'm once again troubled by an indecisive market. This is certainly one of the worst sets of days in the past couple years because the market has pulled back enough to enter a down trend, but in the last 2 days may have entered a bottoming pattern. The problem is that pattern is very weak. It is nonetheless troubling since I hate to flip flop on outlook. One more day of bullish gains would defintely force me out of my bearish position and probably into a bullish one.

Is that hope or...

If you watched the market today, you saw a small gain over the previous losses. Now, this might be the base forming before upward movement resumes, but that could be hopeful thinking. Because the market has already established a down trend in the moving average, and signs don't point to this day being a bottom, I wouldn't bet on it. But hey, tomorrow always brings new insight.

The Tide has turned

It looks like the market ETFs have definitely turned over the top, I'm gonna call this the bearish top. It might be a good time to jump in on some bearish spreads, too early to simply buy the long puts.