Satuki @ Home

Another month flew by.  Indeed, time goes flying. There was a lot of buying/covering pressure, which made my shorting some what difficult. 

I ran a little test this month, which was to take short positions only regardless of the general trend.   As we can see from the monthly S&P chart below, July was a much stronger month than June, in which 30-40% of my trades were long.   June actually was a very flat month.   Therefore it was easier to short in June than July.    In other words, I bucked the general trend badly in July.  If I had traded more on the long side, I could have probably made more money. 

It was difficult to short in July.     But I was still up 1600+, which was very close to the performance in June.   One of the reasons was that I tended to trade much less on very strong days such as 7/30 and 7/23.   Avoiding losses is just another kind of winning.   For example, If your opening trade was a loser, then you need to have a winner that covers that loss before you can start making money. If you have a few losers in a row in the AM, then you will play catch-up all day long for that day and you would be happy to end up flat for the day.   On the flip side, if you do not trade in the AM for whatever reason, your life in the afternoon will be much easier.  So it is important to know when not to trade.

S&P Monthly (Click on the image to have a better view)

S&P Weekly

As for how far the market will advance from here, no one knows.   For me the market is too far from the 15 week moving average and too close to the 15 month moving average.  Bulls use some caution here.

Starting from August, I will be back in the flip-flop mode (mixed longs and shorts).   I hope you all did well in July and will continually do well in August.