Today's Ideas:

    IMPORTANT : Below is what we're looking at currently, but pay attention to our UPDATES on the side of each page for actual entry/exit times and prices. Refresh pages often! You will witness our winners AND losers; something that is rare in our business.    TO VERIFY ACTUAL PRICES AND TIMES, PLEASE CLICK ON  A TICKER ENTRY TO THE RIGHT.  ALL TRADES, WHEN THEY OCCURED, ARE VIEWABLE.  Whenever possible, we have included the ETF symbol for those who are not experienced trading futures, etc.

    Tuesday, August 5, 2008

    The next move

    Let's get the FOMC decision behind us, so we can get back to "normal". The event has little significance this time, other than keeping most participants on the sidelines. I've reviewed certain major themes that have been getting tested lately (ie. the commodity bull), and they are basically intact. Even if commodities are "finished", it does not mean stocks necessarily go up, so the equity bear market is still very much in play. I'll continue to take signals to enter commodities (esp. gold/silver and agriculture), but my focus is more on looking to short shorts. I've been waiting patiently, and there is no guarantee I get active today, but we are definitely close. My short candidates remain the same groups, being real estate, financials, and indexes. I'll short IWM (or go long TWM), IYF, (or long SKF), and IYR (or go long SRS). Remember that these are trades, not investments, so we don't need 50 different ideas for diversification. It's much better to turn our attention to managing proper position sizes, rather than have another marginal "idea".

    Since I addressed position sizing again, let's talk about how recent trades are affecting me. Quite simply, due to small positions, I'm very much in the game and ready to strike. If the Corn futures, or the DGP etf for that matter, were "regular" size trades, I'd already be stopped out of Corn (but still in DGP). These trades never really worked out of the gate, and as such, I have not added. In fact, I have not placed a trade in several days, so I'm ready for the next potential signal...both capital and psychology have been conserved.

    I feel it's important not to spend much energy on labeling markets. Yes, we must know the general trend, but too many traders vest their reputation in an outlook. This leaves them unable to be flexible, and even change direction, if necessary. As an example, I've been a commodity bull for some time. I will continue taking signals as they present, but I'm aware that at least something has changed. The point is that people still can't even agree if we're in a bull or bear market, so that is unimportant. Being correct on a label is not nearly as important as being correct on the direction, for you specific time frame.

    Let's get ready for the fireworks. If they don't come today, we can be sure they are on their way! As always, I'll share my thoughts and actions via the ticker on the right.


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