I am often resentful and at the same time amazed how my luck has been so bad. No matter which trade I pull, they end up red — very quickly too. And then I’d often reduce my ambition (another way to say that I became timid), and set a limit to exit at stop even or at a very low profit, say $10 just to cover commission. BUT, the market more often than not was so stingy that it doesn’t even want to give me the petty $10, and I ended up getting stopped out. It is just so darn amazing that it’s not even funny. Many days I had wished that I was better off not trade at all.
That aside. Today was impossible to trade. SPY’s daily STO is 85, RSI is 71.77, and it’s been toying at the 1300 level. Either long or short entry would be nerve racking. I was lucky that disaster didn’t strike and I ended up near break even. 7 trades with average buy and sell price at dead even $129.73.
Like Jack Steiman says, in a confirmed bull market such as we’re in now, when the market is overbought it is not a signal to short. But it is not appropriate to be aggressively long either, especially given the bull-bear percent spread of 36. What’s appropriate to do is to have some exposure in individual stocks that’s not frothy, and it’s OK to be in cash. It is not OK to short because as the market grinds higher most of the time, one can only have a very small window of capturing a sudden correction. After the sudden correction the market will grind higher again. So to short is to be glutten for punishment. You’d be taunted most of the time and yet you’d be missing the sudden correction. For some reason, I’m so fond of shorting — a glutten for punishment.