Monday, November 28, 2011

Market update

I have a VST buy signal from overnight. Will enter SPY long as soon as premarket trading opens at 8 AM ET with a 2% stop.

I still have 10% of the short TNA swing position. Stop for this is at the open position 43.4$. For those ST swing traders, I cautioned you to take 50% off the table on friday. That post came in after hours, but was good enough for you to close half of your position as it was SPY. However, none of my systems signaled a buy on Friday or reversal of the signals.

The reason for my post asking to take profits on TNA and also swing SPY short is to ensure that you lock the profits, regardless of the market direction the next day. I have taken short TNA position at 43.4$. At friday's close of 33.67$, we were looking at a 22.5% gain in 4 sessions. In stock markets, bulls win, bears win and greedy pigs get slaughtered. I don't want to be a greedy pig. Hence, I took 90% of the position off in 2 stages. We had 7 days down before today, and to expect another day would only be greedy.

The ST/ swing sell signal is still intact. /ES is up by 2.8% in today's premarket. I believe it will hold up to gains in real time trading on SPX. That will not change my swing sell signal though. We will still be in a swing sell signal even if we close 2.8% higher today which only means that the downside objective is not fulfilled yet. I believe that this down leg is not over yet. We got our swing sell signal at 122.25$. We took a 5% gain on half of the position at Friday's close of 116.34$. Our stop for the other 50% is at 1% above 122.25$. Or close the swing position when we get a cash signal. Even that way, your gains for the swing position will be 4%, only because we took 50% off the table.

For any system that you follow, I told you that asset allocation and market discipline is very important. Without these 2, you will have any net gains over the long time.

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