Antsy to Buy
The market in the
U.S. declined yesterday, but the selling could have been worse. The
indices declined a little over 1% at a 4 to 1 decline to advance pace.
Volume was also high and it will remain that way until options expire
Friday.
SPX gapped through 1280 support, which was somewhat expected. The
index had been mulling around that level for days finding support in the
1290 level over that time. SPX quickly moved down to 1260 and within a
percent of 1250 support. The bulls defended that level without any
hesitation and despite a global market sell-off.
The index rallied hard into the close, but at the finish found
resistance at 1280 and moved sharply lower. It will be telling if the
bulls can hold 1280 today. But, the bulls thus far have protected 1250,
which is the big number to watch this week.
I'm already getting the urge back to get long this
market again. Our previous trades didn't work, we were fighting a
stronger near term bearish trend than anticipated. But it was necessary
to keep buying. Although I was overly aggressive to the long side, a
mistake we didn't make in the November pull back, taking long trades was
the correct call to make.
You have to stay with the larger trend and give it the benefit of
the doubt. Many times, the trend looks over, especially during quick sell
offs, but the market can resume the trend just as quickly. And for the
past seven months it had, and we were there every day buying every dip.
The near term has been painful, but look at the gains that were made
staying with the bullish trend before the shake-out occurred in February.
And despite the string of losses, which is unusual, one big winner is
enough to cancel them out. And we had two such trades (ALJ, HILL) this
year and there will be plenty more just like those.
As a trader, especially if your holding period is small, you will
go through countless streaks. During the good times, it's easy to be
complacent, when you're hot nothing can stop your analysis. But the bad
times can be equally as tough. During those times it's important to stick
with your plan - whatever that may be - even if that plan is DON'T
TRADE.
Watch
List
The TradeMaster Daily
Stock Alerts watch list is
bullish again but cautious except on bonds and technology. For a full
list of our trades and video of our current stock watch list CLICK.
