I don't know - haven't been as interested in the wiggles lately. I don't know how much time I really want to spend on this. I'm not sure how productive it really is for me or for society. I guess I kinda feel like it's playing a game for me, and I'm questioning how much time I should spend playing it.
I seriously question the marginal rate of return on invested time as you step from one year to one quarter to one month to one week to one day as your time scale of reference for trading. It's roughly a factor of 4 decrease in time step every time you move out that scale, and a similar increase in effort. I seem to produce solid double-digit annual returns regardless of the time step I employ. The more I pursue the smaller wiggles, the more I ignore the bigger picture. In other words, gains on the short-term stuff seem to be offset by losses in the bigger picture. I may nail a top to 0.1% with my daytrade capital, but then miss the fact that my long-term stuff, while heavily short non-tech and long tech, is effectively not short at all due to beta differences in tech vs. non-tech. (Actually my present situation)
My focus on the wiggles has been to apply them to nab excellent entries on long-term positions. But with my portfolio fully allocated right now, I don't need any more long-term entries. I'm looking for a good spot to ditch my long-side hedges, but I'm not convinced the upside risk has abated yet.
In other words, my long-term strategy must drive my wiggle trades. Right now, my long-term strategy is calling for getting out of some QQQ/SMH longs to expose my non-tech shorts more fully. While non-tech may be coming off the top impulsively, tech still smacks of corrective behavior off the December high. The way NDX looks like a perfect little flat is driving me nuts right now, and I don't feel comfortable trading with it or against it until the flat appearance is removed by the price activity.
Long answer to a short question!
BC |
