Market Is An Untamed Beast

Even if you raised a tiger in captivity as a pet, he will someday return to his beastly nature and kill you.   I did not grow up with the market, and do not know the market dynamics fully, and yet I was tempting the market as if I do.  The only way to “tame” the market is to take stop losses, which I found to be extremely against my pride-based human nature.  Today I ate another humble pie.

It’s the Friday before Christmas Eve.  The market had a small gap up but plenty of over laps during the Open Range(OR).  Based on the OR denoted by the first blue square in the 5 minute chart below.  I had thought today would be a boring range bound day.  I thought I’d fiddle around in small day trades.

Then my respected Dr. Fly tweeted that he added TZA, the triple bear small cap ETF.   While he was holding 75% long 25% cash right now, all I saw was the fact that he’s added TZA for the second time this week.  (Seeing only things I want to see is another deadly human nature in trading.) All of a sudden, I was “coerced” into becoming aggressively short, as opposed to my earlier planned, low key “ceremonial” 100 share adds of SPXU while keeping my position small for the rest of the year.   I lost sight of the fact, and I even blogged about it, that the greed for bonuses would propel the market to rally, especially with the YTD breakeven level being so close.  I lost the sight of the Santa rally with Christmas just 1 day away!   For the day, I’ve instead added 100 SPXU, 500 SDS, and 200 TZA to my portfolio!!  With Dr. Fly hedging his longs with TZA, and the SPY going up against a confluence of resistance today (200 day SMA, last year’s close, and the 6 month down trend line — see daily chart below), I felt somewhat justified.

The market then first broke out of the OR, and then reached the OR target (2nd square) without hesitation, into the positive territory (> 125.87) for the year.  It then consolidated around my 200 day SMA of 126.10.   I thought at this point the pros had all left for Christmas and that’d be how the day finish.   Again, I couldn’t sit tight for some reason and took one last scalp near the final minutes.   Alas, the market beastly nature came in full view.  Out of no where, it rocketed into the close and I was trapped with 500 shares of SPY short.  What a way to end the week!!    Not only is my personality hazardous to be a trader, my luck is incredibly jinxed.  Plus, I don’t seem to be able to learn from past lessons.   Full time trading is simply a wishful thinking.

Merry Christmas!

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