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I got stopped out of two longs this morning inside 12631, with the market coming under more internal pressure. Despite the Russell 2000 small-cap index heading down to that round 800 number, the S&P 500 is still printing an inside day. My sense is that the market is offering up a “max frustration” or maximum boom-boom scenario to both bulls and bears here. The direction bets via either TNA or TZA might be missing the mark, as I think this is more of a stock picker’s market than anything else.
I still have a bunch of longs that have yet to come under much pressure at all, and some like WFM and RTN that are showing excellent breakout potential. I am trying to stick with the prevailing trend, but the market is putting me to the test here. As always, the first and last lines of defense in my portfolio are position sizing and stop-loss risk management.
What, praytell, do the bulls have to be “frustrated” about? Becuase they can’t cross DOW 13k, after an unabated two month launch higher? When will I see the headline, “Stocks lower amid profit taking?” At some point, enough is enough. Slowing growth, rising inflation. Europe depression. Dollar higher. Not sure what upside bulls are looking for up here?
You seem like you have it all squared away.
Not at all. Just looking for some reasoning other than “don’t fight the trend.”
Not fighting the trend has served me pretty well overall in 2012. We have plenty of other blogs on iBC that address macroeconomic data and issues. I focus on price action and market psychology.
picture,,,,,me lov u long time?
Full Metal Jacket
Chess, if you pull back to the 60min view on SPY, doesn’t it appear we’re at the lower end of the uptrending channel?
Yeah