The Strategy is Simple

I have made back almost 10% from the lows of last week. When staring at the abyss, all I could think about was how stupid I was for holding these four horsemen all the way down. Since the bounce, I sold half of my WDAY position and all of my SPLK. I added to YELP (sub $60) and have been very patient with FEYE. I even added a new position today: TWTR.

Part of me wants to go out there and buy PANW, DWRE, NOW, BLOX, YY, DDD, SCTY and all of the other stocks that have been hit. However, I remember the pain and earnings are right around the corner. Should we get some earnings short falls, we’ll be heading right back towards the lows, in no time at all. I believe FB will be a major earnings driver, as well as AMZN and CUDA.

My basis for YELP is $72.43 and FEYE is $65.74. I can add to both positions now; but that would be an emotional move, based upon a feeling of euphoria and not reason. The smart move here, for me, is to wait a little longer. I am not so much hoping for a decline in YELP or FEYE to justify buying more. On the contrary, if they both head lower again, that would be vey bearish for their recoveries. I’d rather buy into strength, knowing the earnings season is going well.

Ideally, I’d prefer to avoid all earnings calls. They make me sick to my stomach, the massive gap ups and downs based upon a single report. Think how stupid that is.

Understand that I am being rational right now, but that can change by the end of the day.