It's Situational!

Tuesday, February 5, 2013

Roller Coaster Ride

Monday the markets suffered its biggest decline for 2013. The major indexes were all down over 1% and my portfolio took a hit. I did close out PPHM for a nice gain, but nothing else was working. I tried a play at FB, but got stopped out for a small loss. I got into UNXL and that didn't work either. I decided to hold overnight and today was a complete reversal. All the losses from Monday disappeared and Im back to my all to time. I close UNXL for a nice gain and held on to my AAPL shares and 1 naked put. We went from my worst losing day to my biggest gaining day of the year!

Lesson: "The Trend is your Friend..."

Sunday, February 3, 2013

Great Start to 2013

Its been a great start to 2013. My portfolio is up more in one month, than what I made for all of 2012. The market is in bull market mode. There are plenty of reason to be bearish now, but we continue to march higher. The mainstream media cant explain it. The economy is shrinking and unemployment is still stubbornly high. We are "climbing the wall of worry," despite the fundamentals being weak. This is the best time to be momentum trader, despite all the warning signs.

Here is my reasons why the markets continue to march higher. After Obama got re-elected, many traders got short. The market drop almost 1000 points. The media said it was worry about the 'fiscal cliff', and when that didn't happen, market participants shorted even more stocks. After we got a fiscal cliff, the shorts had to cover and the market spiked up. The shorts have been covering ever since and have even remounted with more shares shorted, fueling the fire.

We wont go up forever, but my theory would be any dips will be bought quickly, as professional money mangers try to get ahead of the markets. Below are all my closed trades for Jan. 2013. I did not take any losses until the final days for January. No body is perfect and I had to use my own advice and minimize my losses to keep my gains.

Friday, February 1, 2013

Take Easy Profits When You Have Them

I took profits in DECK after a $.55 gain in about an hour. The stock did proceed to climb another .35, but after hitting a high of $40.61 it started a downtrend ending the data at $39.92. If had had held, my profit of .55 would have ended with a gain of only $ .22 and emotionally, I would have felt bad for not taking the gains when I had them.

Two Lessons here:
1. Follow the Trend, don't anticipate the trend. The Long term and short term trend in DECK was up. After bottoming around $39.41, it spiked to $39.80. This was my trigger for a reversal to the main trend. I waited to for it to dip back to $39.70 and held for 1 hr for a quick .55 gain.

2. Bulls make money, Bears make money, Pigs get slaughter. Dont be greedy in trading stocks. Take gains when you have them, not when you have too. There is always tomorrow for another trade.