Fake Out

Well, the last paragraph was very telling about my exposed bias to the bullish side. It ended up kicking me right in the gut. I am still up 17% overall but gave back nearly 7% over the course of the day, which is unacceptable.

Obviously the market does not follow my expectations. My assumption or hope of a rally into the close did not happen, the opposite happened and we had a sell off, apparently under the fears about maybe the economy not recovering and rising oil.

This is where a mechanical trading system would come in handy where I could set my exits for either a profit or a loss then just let it go. I would have been stopped back out of both FXI and BIDU today. BIDU broke its trend that was holding so nicely earlier in the day. I came back to find the profits I had previously banked on my V trade gone. DRYS held its previous support level but gave up all gains and turned into a loss just below my limit.

We will see how things go tomorrow because we broke back through 1400 today on the S&P, it did hold 1390, but a close below that would signal a failed break out. In my opinion there is not a reason to completely change stances on the market, and sell offs do occur in a bull market but I can't say we are in one yet, especially if support fails tomorrow.

Time to go shopping for some puts to balance myself out. Obviously I'd rather buy some puts on an up day with downtrending stocks going back up to resistance, but maybe there are some break downs. Not to mention index puts if we go through the 1390 level.

It's never fun to see gains throughout the day then by end of day your watchlist says "you have no gains to display". Oh well, tomorrow is another day and we'll see what happens.