A Battle Of Emotions

As I sit here encumbered with a 50% cash position and a hedge, I’m woefully disappointed that I was juked out of TNA & CF, and my VXX short and missed out on such a wonderful day. However, I know the counterbalance to that emotion is the feeling of joy I would have had, knowing I was protected by such decisions, had the market sold off in equal ferocity on some stupid EU news. This battle is really at the core of what makes a good trader, a good trader. The best can sociopathically ignore these emotions, and are thus able to approach the market from a completely objective standpoint. On the other hand, the worst succumb to the transfer from one emotion to the other as quickly as the market transfers from green to red each day.

I sold out of AEC at the end of the day because I don’t have the patience of Cain, but rather the patience of a child. I like to see my positions win, and win quickly.

This leaves me with MU, WNR, GSVC, SCHN, CENX and a SKF hedge; a portfolio that underperformed today. However, while I missed out on today, a key issue still remains: in all likelihood, we will trade at this level or lower at least one more time.

Here’s where I stand right now: conflicted by two major issues. On the one hand, the market could see earnings take a severe hit, buried by the burden of a collapsing Europe/Euro and rush to the USD and avoidance of risk. On the other, I still see fundamental reasons for us to trade higher. Mainly, earnings projections north of $90 and rates incredibly low that would put the S&P500, on a typical P/E, north of 1400. Moreover, as we come to the end of summer “fuck you” trading and halfway through a historically scary month, I see tech and trannies starting to lead the way. Tell me: Are we in a recession if tech and trannies are leading the way? NOPE.

If we don’t immediately trade lower, in follow-through of this afternoon’s selloff, then I see us consolidating some very bullish action and I believe we’ll trade higher. If the market plays out like this, I’ll be back to low cash, no hedge in no time.

Take it easy.