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.

More Titration Please

After today, you should be considering a neutral position once again. Things aren't sliding downhill, but that doesn't mean they won't. No clear indication which way tomorrow will go.

An Odd Day

Another day of strange signals, blame it on the State of the Union or Apple's ipad unveiling but more likely it's just the market still setting up. I'm increasing my optimism about upward movement, but no clear cut sign yet.

Years of Searching

I've been looking for years for the holy grail - a system that works for making money in the markets. All I've found is excitement followed by major dissapointment. It's time to get simple, and time to look at what is happening, and stop worrying about why it's happening. The media has all the reasons for the market moving, and amazingly, they are never able to predict ahead of time how it will move. No more BS, just some numerical observations. Here are some charts to look at:

The blue line over price is a 50 day EMA, nothing special. It helps to confirm trends and the direction the market is moving... Oh, that strong upwards diagonal means that all the BS we heard about how bad things are made us miss some huge gains. If you study the charts, you'll see some extremely basic relationships between price, the EMA, and the lower indicator.

Right now we're at another turning point within several days, either the market will continue up (we have been in an up trend so there's no reason to doubt this) or it will turn down. Either way it's good news to know what's coming. For the bullish trend to continue (super entry point) we want the EMA to continue movign up and the red line and green line at the bottom to begin converging sharply. today was odd since we neither saw conversion or continued losses, basically it is a very unclear time for the market. If I had to pick sides, I'd be optimistic.