Sunday, May 6, 2012

A Trading and Life Update

As you may (or may not) have noticed, I haven't written for about three weeks now.   Two main reasons for that one - one market-related and one life-related.   First, let's talk about this market.   To put it bluntly, it sucks.   Sucks for bulls and sucks only a little less for the bears.   I have only traded for about six or seven years now but one of the many things I have learned is that the market really only presents two or three tremendous opportunities to make money each year.  We saw one of those tremendous times from January to March of this year.  Unfortunately, outside of those two or three great periods, the market mostly chops around in a way to screw everyone as equally as possible.  I think we've experienced that "screw everyone" period for the past month now.  

If you have traded well and been successful during April and May, congratulations.   I do think you are in the minority.   I know my account is down about seven percent for this quarter, and I really haven't even traded much the past two or so weeks.  We've just been moving sideways now for over a month, with the bears showing more strength than the bulls but just not enough to move us into a full-blown intermediate-term correction (or even bear market) that would have me shorting things left and right.  All you really have to is look at the chart below to see what I am talking about.

S&P 500
 Chart from TC2000, Courtesy of Worden Brothers, Inc.

Since the beginning of April, one other disturbing trend I noticed is that I started to see virtually no setups when I went through my scans each night.   They just weren't there.   This gave me pause and in hindsight was telling me something.   I am not just talking about long setups - there were hardly any short setups as well.  It was kind of weird actually.   This is one big reason I haven't written in a while - I never just want to put stuff out to just to put it out there.  When I don't see any setups that excite me, there really isn't anything to write about.  

In addition to the market telling me in various ways to not trade as much, life has seemingly done the same over the past few weeks.   Termites, water leak, sewage backup, even a little mold (from the water leak) - all words that homeowners fear but I have had to deal with all of them over the past few months.   Normally, that wouldn't be a big deal but the sewage leak occured at the same time that I was remodeling our kitchen so doing two projects at once really was difficult.   I am pretty much done with all of the kitchen stuff and wrapping up the fixes needed for the basement now, but it's been very, very hectic.  Throw in a nasty cold/virus that went through our house over a week ago (with all four of us still having a cough and feeling run down) and you have a good reason to step back from trading a bit.  

I am not sharing this expecting any pity or anything like that, because I don't feel that way.  I don't need any.  Life throws things at you and you deal with it.   Things can always be worse - for instance, my wife's uncle found out recently that his house burned down the same day he was going in for surgery for lung cancer.  Now that's bad.  My point in sharing is just an explanation why I haven't been writing or trading much.  Since all of this is free, I guess I don't have to give a reason, but I feel I should.   I am looking forward to summer very much as hopefully we get a little respite from the stresses I have had recently and can relax and regroup.  Maybe I can even get back to trading - IF the market tells me it's time. 

I haven't been trading much but I really don't feel like I have missed anything.   This has been an awful market to swing trade and I don't know if it will improve anytime soon.   Earnings plays aren't working.  Breakouts have been working only occasionally (at best).  I may consider shorting a little if we break down further with a weak rally following, but all Uncle Ben has to do is hint at QE 4 or 5 or 10 (I've seriously lost count) and we are up and away again, screwing the shorts.  My signal has vacillated back and forth between neutral and sell for the past month and until I get a clear buy signal and start seeing charts that act well, I will stay mostly in cash.  As I said in the previous paragraph, the market has to tell me it's time, and so far it hasn't said anything like that.   I'm listening though.   Good luck if you're trading and if you're not and just sitting by like me waiting, don't worry.  Better times will come.  They always do. Take care.


elingford roban said...

I could'nt agree with you more...the markets have been very tough to swing trade indeed!

richard0028 said...

Well I had noticed and I missed you. Yes the market has been a chopfest, but what's new. Glad the personal stuff is behind you and while it sounds stressful, was not life threatening, so on both counts we live to fight another day. Keep smiling

Quin said...

Thanks for the update, Ryan. Glad to hear things are getting back on track for you. Take care.