Satuki @ Home

Today is the inauguration day for President Barack Obama. The stock market slaughtered the bulls without mercy. I have full confidence that our economy will recover in a year or 2. Nevertheless, I only care about if I am on the right side as far as trading is concerned. It would be a beautiful day if you were on the bear side. So there is no such a thing as “The market is brutal”. The correct way to say is “The market is brutal for traders on the wrong side”.

As I mentioned in the past, 8 out of 10 stocks move with the general market. So you need to pay attention to it. I use SPY to analyze the market, which is a proxy to the S&P 500. Left is a 3 minute chart that shows today’s down-trending market clearly. As we can see that each bull attempt was very feeble. There were lower highes one after another. Your attempt to go long should be limited. So you could protect your trading stake by sitting on the side line at least. Or if you went short, then it woud be even better.

As I said on Twitter yesterday, I would day trade Drys and a few other stocks. I did trade Drys once on the long side. I lost a little bit,which was basically the commission. As we can see from the 3 minute chart below. I went long @ 13.56 as I mentioned it today on twitter before I entered this position.

The entry was perfect. Take a look at the volume and the pattern. Tell me what you see here in the comments. It was a text book set-up. I will talk about what a good entry is in the future. Immiedately it spiked to 14.05. That was around 3.6%. But I did not make any money on this one,since it did not hit my target(6%). So I had to let it go. Of course, I moved up my stop loss to the break-even point right after the spike. So 2 things here. 1: rock solid descipline (No Randam Exit). 2 Never turn a winner into a loser. I had some 260 paper profits right off the bat. But when it hit my stop loss. I wasn’t thinking like “Oh, I need to remove my stop loss since I had a chance to make 260 early.Now it is almost red. I can not take it.”

For my swing positions in My Portfolio, RIMM hit the target and I was out. And all others except FSLR are gone. I am actually doing fine even if all my trades were on the wrong side. The Profits from RIMM easily cancelled the losses from the losers. I would have lost more if I had not cut them. So when NASDAQ tanked 80 some points, I did not lose any money as a bull. That is not too shabby.