While most ofÂ the other bloggers writeÂ a good bit about their trading, I generally have not done so. Well, I do trade, and today wasÂ one of my better days, so I thought I’d take the opportunity to write about it.Â
Since November, I’ve been calling the turns in this market like a working-man’s magician (not to be confused with the space-alien magician). Yet, I’ve been trading small due to having a difficult time last year. Trading small has allowed me to regain my confidence, and have a modestly good year, so far.
My research on tops and bottoms showed that we were due for another rally. This research, coupled with the research of a few others,Â allowed me toÂ feelÂ certain it would come this week,Â although IÂ expected another flush-out, and then a reversal day.Â I decided that when the relief rally developed, that I would cover all my shorts, and get really long. What’s the use of developing a great read on the market if you do not trade your convictions?
As I cannot trade anymore at work, or even get real-time charts, I’ve been working with my Dad and sometimes my wife to allow intra-day trades. I talked to my Dad last night on the phone, and told him I thought we were due for a rally. I asked if he would be around this week to place some trades for me. He said he would be.
So today, when I saw what Bernanke did, I knew immediately what I had to do. Making matters a tad more difficult was the fact that I had to be on the road at 9:15 a.m. to a meeting. The last time I was able to look at the futures was just before 9:00 a.m. I called my Dad, and told him that I expected the indexes to dip around 10:00 a.m. I gave him instructions to sell all my [[DXD]], [[SDS]], [[QID]], and cover my [[DE]] short onÂ any dip. Once he liquidated those, I gave him a list to buy. I had him buy 300 SPY, 300 DIA, 300 QQQQ, and 300 UYG. These positions, coupled with a small position in [[MBRK]] would leave me almost 100% long.
Well, my Dad came through for me, big time. He waited and waited for a dip. Finally, after 11:00 a.m., he executed the trades. Excellent work, old man. Due to this maneuvering, my account had a second day in a row of outstanding gains, making a new high for the year.
My plan is to liquidate these positions into more strength, or near the 50 day average.
Overall, I am still bearish, and until the price overtakes the 50 day average and tests and holds it, I will not become bullish. Volume today was a joke, for such a strong move. In order for the double-bottom pattern to work, volume will need to increase ifÂ the indexesÂ continue moving up. Fundamentally, Bernanke’s knuckleball may be a game-changer. However, I’m not qualified to judge such things, so I’ll continue to trade the technicals.