In the world of investing, we always read and hear about investing principles. Some of those principles revolve around the concepts of buying strength and shorting weakness.
The concept of buying strength, when the market is showing strength, is finally taking hold with me. Shorting weakness, when the market is showing weakness, is the same principle. That's what I like about principles, they never change. The only thing that changes is how we react to them. I'm going to stick with good investing principles.
In looking at my past trading records and trying to analyze my performance, I see that too often, I was chasing after under performing stocks. The concept of buy low and sell high was interpreted by me, to buy stocks at bottom prices and hold on to them in hopes of them improving. It's a concept that works but, only some of the time. You can't maintain consistent results with that investing strategy, especially when most of one's portfolio is tied up in that sort of stock selection.
Since the market is still in a narrow trading range, it's prudent to sit and wait for it to break up or down before deploying the proper strategy. In my opinion, anyway.
I suppose I could try the energy sector here, if I felt a "need" to trade but, I'm trying to get over the feeling that I need to do something. In the animal world, the best hunters are the ones who are very patient. They stalk their prey and show incredible patience, waiting for the right moment to strike.
I'm working on my hunting skills. Today may be just another day of watching for me, unless the market has a huge move, in one direction or the other.
I have my long and short selections. I'm waiting on the market to move to a more advantageous position before I strike.
In looking at the charts of MAY and WMT, for example, it looks like the retail sector may be ready to pull back, unless they come out with some strong earnings projections this week. Those charts certainly suggest protecting profits at this point. I've mentioned I wish to short retail when I thought the time was right.
stockcharts.com[h,a]daclyiay[d20030312,20030811][pc20!b10!f][vc60][iut!Uo14!Ll14]&pref=G
I have my sights on DG. Take a look at the Bollinger Band configuration. The narrow bands strongly suggest trading in the direction of a break out, when the time comes. That's what I plan on doing.
stockcharts.com[h,a]daclyiay[d20030312,20030811][pd20,2!f][vc60][iut!Uo14!La12,26,9]&pref=G
On my moving averages chart, only 34 cents separates the 10, 20, 30 40, and 50 day moving averages from each other. The supply and demand for DG is in balance. It won't stay this way if the market is to work. I'll play the break, up or down.
Sitting in the tall grass, stalking and patiently waiting,
da-hunting-bum |
