Friday, October 2, 2015

Market update

Previous update here

What did we say in the previous update?

At SPX ~ 1978 on Sept 15th, we said "The odds of the market becoming bearish again have increased as our guage indicates below and primed for the market to move south. "

Here we are today at SPX 1923 after a low of SPX 1871 2 days back. I hope you made the best of the market going down.

What did we do after the previous update?

At the time of previous update, we were positioned all bearish in all time frames. The market spiked up in FOMC's bullishness to > SPX 2000 and then went down for the last 2 weeks. We covered the ST short positions on the downturn. Not at the bottom but on the rebound at SPX 1890. 

I hope you got the summary of my post and traded the same way! When in doubt, ask questions. Simple. 

Why was this blog quiet for 15 days?

When there is no change in the update, no posts are done. 

Traders are often frenzy aiming for 100% in 10 days or 1000% returns in 90 days. Come on, people. Be modest in your expectations. And then trade calmly. You don't have to flipflop your positions every single minute to score big annually. 

You get the outlook correct. You get in the positions. If you are wrong, get stopped out. Otherwise you have a chance to score 2 - 3% on the ST. Few scores like this will take your account to 20 - 30% up annually. Trading every minute takes your account to zero in no time, Believe me.

Current market update

As the chart below indicates, the market is primed for ST (short term) neutral to bullish. We use other guages as well to position ourselves, which currently indicate for a bounce short term.

ST - Buy
IT/ LT - Sell

Our positions

This is a counter trend ST move against IT/ LT bearish outlook. Usually we position 50% of our account in ST, 20% in IT, 30% in LT. Since this is a counter trend move, we position only 30% of our account in ST.

Always remember, we are mostly right. We are not always right. When we are wrong, that is when stops are useful for us, stops are useful for you as well.  

Good luck trading to all! 

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