So much for the resounding negative market prognosis posted on the Weekly Update.Hey! Stuff happens. The trick is to avoid having your trading account become collateral damage when the technical signals implode.
Luckily I still had some upside breathing room in my hedged positions and added some GE and Qs longs mid morning, which I exited at the close. Gotta go with the flow and with the NYAD on a tear, the odds were clearly with the bulls.
On a side note, a while back I enjoyed watching The Bucket List with Jack Nicholson and Morgan Freeman, especially the part where Jack expounds on his 3 cardinal rules of life. . . one of which was to never pass up a restroom . . . the other 2 rules. . . well, you'll just have to see the movie.
With a similar view towards the markets I suggest the following possible rules for traders:
1. Never underestimate the market's ability to surprise
2. Always expect any such surprises to be contrary to your current stance in the market
3. Be prepared and willing to quickly change your market stance
I'm sure my clever readers could come up with a rules list with considerably more pizazz, but these are a good start (IMHO).
1 comment:
I have one rule that I always consider: the market will do whatever causes the most pain for the most participants. So, on this last run-up, the great majority of people I know were bearish and short - or they were under-invested - thus, this run-up caused the most pain to that group. It's obviously not always true, but something I think about.
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