nothing much has changed on my overall views on the market nor my preferred trading style. for the last couple of weeks, i have stated that the technical picture was unclear and i warned of the risk of very volatile, unexpected moves in the market. as i’ve stated before, making money by trading stocks comes easy…it’s holding onto those profits that is most often the difficult part. by moving towards a large cash, hit-n-run quick trading style and even stepping away from the market completely at times over the last few weeks, i have managed to preserve, and even modestly increase some of the nice gains that i’ve booked from swing trades this year and i hope that those suggestions helped others avoid getting caught on the wrong side of some of the big moves that we’ve had recently.
as both my near-term and longer-term bias continues remains bearish, i continue to nibble (scale into or add onto) selective short positions but am also fine with trading some of the better looking long set-ups as well. also keep in mind that i have different trading styles for different accounts. for example, in my trading account, i am much more apt to take profits at the earlier targets, preferring to use the intraday charts to confirm and time my entries and exits. in my IRA’s, i still favor a decent cash balance (not fully invested) but i will typically give those trades more room with the stops and hold out for higher targets, assuming the charts are still confirming. like my trading account, i have both long and short positions (typically short via etf’s or puts in the IRA’s) but since last week, i am skewed towards an overall net short position just like my trading account.
finally, keep in mind that this sloppy, day-traders type market won’t persist forever. therefore, i would suggest taking some time to put together your “wish-list” which would be a list of your favorite stocks, either longs or shorts, that you can jump on should this market start to make it clear as to which direction the next primary trend will be. also remember that earnings season is set to kick-off which will only increase volatility in the coming weeks. we are in the summer doldrums folks and that’s just a fact that you must accept if you want to actively trade this market right now. with the low trading volumes that the summer months brings, day to day gyrations in prices increase and market conditions typically favor the hit-n-run style like day trader or more active swing trading vs. buy & hold investing or longer-term swing trading. in my experience, patience and the ability to “let the market come to you” is at times as important, if not more, than your individual stock picking skills.