Thursday, March 26, 2015

3/26/15 Fear

If there's one 'secret' to trading success, it's the ability to manage fear.  There are two components to managing fear: (a) refusing to act on it (the fear of missing out on gains, the fear of losses), and (b) managing risk to avoid placing yourself in a position of fear (managing trading risk, size, and frequency).  Successfully managing fear then allows you the composure to buy when others exhibit maximum fear (ie, panic).

(a) Following Wednesday's rout in global markets, additional fear played out overnight in market futures.  DJIA futes were down as much as -200 points, and have now recovered to -87.
(b) INTC (Intel) has slid further to 29.50.  Note that scaling in yesterday with a quarter position now allows me to consider adding on further weakness.
(c) EEM (Emerging Markets) off -0.3%.  SPY (S&P500) off -0.5%.  Anyone who bought last Wednesday's post-FOMC breakout (fear of missing out) is likely at the point of stopping out around here (fear of losses).  In contrast, by reopening partial positions on yesterday's weakness, I'm free to either add or give the positions more time.

Ramping up position size (which increases position risk) can easily introduce fear.  I plan to simply exit positions on further weakness (for a minor loss), or close positions on strength (for a minor gain).  No point in 'doubling down' in this environment.  Neither do I believe we bounce back quickly, so no point in hoping for more than minor gains.

Wednesday, March 25, 2015

Wednesday, March 18, 2015

3/18/15 Killer Joe

Yellen rocks the markets.

EEM (Emerging Markets) +2.45%.
RYWVX (Rydex 2x Emerging Markets) +4.9%
EWZ (Brazil) +2.89%.
PBR (Petrobras) +5%.
FCX (Freeport McMoran) +4.65%.
Goldcorp +3.1%.

All-in on Tuesday for an aggressive bet on FOMC.  Total one-day gain for the port +4.4%.  Killer day.

Saturday, March 14, 2015

3/14/15 Just My Imagination

(a) 'Just My Imagination.'
(b) 'Oh Girl.'
(c) 'Have You Seen Her?'

Against a backdrop of turmoil and violence in the late Sixties and early Seventies, a few Motown/R&B groups released a series of beautiful ballads.

Saturday, March 7, 2015

3/7/15 While the Blitzkrieg Raged

According to Vic Niederhoffer, Friday was the second time since 1999 that both stocks and bonds sold off as hard in the same session (the other instance was January 29, 2009).  SPX -1.5%, TLT -2.2%.  '5 trillion loss in stocks, 5 trillion in bonds-' (Niederhoffer's numbers).  No place to hide.  Gold -2.7%, miners -7%.  XLU (Utilities) -3%.  EEM (Emerging Markets) -1.5%.

I think the six-year-old bull is tired, but probably has the grit to hit new highs once more before going down.  Expect dip buyers to show up next week.  If we gap down on Monday, buy/add.  If we gap up, sell and buy back on the retest.

Wednesday, March 4, 2015

3/4/15 Comment Cleaner (Plain)

What do you expect with the plain variety?