Initially I was fairly upset not participating in the past two days of gains. While it is still true pretty much all the stocks I wanted to get back into would be profitable, the action in the broader market is giving me pause. Two times now we have broken above resistance and sold off back below. It is somewhat a confusing time because the Russell already broke and closed above resistance which would lead one to believe the S&P will follow suit. On the other hand, many of the sectors are significantly overbought at fairly historic highs in the bullish percent figures. What this generally means is there is significantly more risk to the downside and much less opportunity to the long side.
This doesn't mean I run out and try and short everything in sight but I will be looking for some good put candidates and may need to buy back my JBLU puts as my original thesis could be broken.
I doubt the old saying of "sell in May and go away" really applies, it is just the fact that stocks have run so far so fast it is only natural to have a pull back but it could be significant if we don't keep getting decent catalysts showing some economic recovery. I am again annoyed by myself in that I have not taken risk day trading as the past 2 days would have been profitable had I traded my plans. It is obviously worthless to say since I didn't do it but at some point I'd like to be comfortable taking the risk again with confidence.
My account gyrated between profits and losses as we traded in a fairly large range but ended up essentially flat. My only real position of concern is JBLU right now with the swine flu weighing on it and if the market rolls over it will not be helped at all. I would be fine if I thought this was a simple dip that will be bought but that has yet to be seen, if people don't buy at 865 or so it could signal an end to the uptrend in the short run and possibly longer. Overall I think people still want to buy the dip, but they may want a much larger dip this time to be enticed to buy.
Total Return for 2009: 133%
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