Monday, April 22, 2013

Why I Haven't Been Writing Much Lately

Hi traders.  I've received a few emails asking about why my posts have become less frequent and figured it was a good idea to let whatever readers are out there know why.   It really comes down to two reasons.

The first reason is simply because I've been very busy with non-trading things and just haven't had as much time as I normally do.  I do have a full-time job and have just gotten through our most "stressful" time of the year so I've had some things to deal with there.   My son is now old enough to play baseball this spring so coaching is taking up some time too.  Not complaining about that - actually I'm glad to see him asking me to take him to practice hitting and don't want to discourage that in any way.  There is also the simple errands/duties that life throws at you, and springtime brings many.   I spent this weekend taking down a large tree in my backyard and cutting it up to dispose it.   Fun stuff.   In general, however, time has been at a premium.

The second reason is more market-related and is something I've talked about before - I just don't like this market right now.   My trading/results have been very poor this year.  I take responsibility for that and need to improve and adjust, but I still believe that this market has not been easy whatsoever.  That was some great breakout on the Nasdaq and the S&P on April 10, huh?  Not so much I guess.  In reality, the market has done nothing but go sideways since the beginning of March.

Nasdaq for Year
Chart from TC2000, Courtesy of Worden Brothers, Inc.

That's not to say that there haven't been opportunities.  There has certainly been some out there, particularly in the biotech stocks.  The problem for me and in my situation is that this has been a day-trading market for the past two months (and I would argue even earlier than that) and because of my job, I just can't follow the market as closely as I need to actually make some money right now.  As a trader, you have to know when the odds are better or worse for your particular style or circumstances and I know that this particular market is not one that fits me at this particular point.

Because of that, I just haven't been trading much at all.   I've made a total of five trades this month.  Part of that is simply because my confidence (always an important factor in trading) has been beaten down because of the way my year started.   Sometimes when you are in a trading funk and can't get things going, stepping away and slowing things down is a necessary tactic.  You never want to get in a situation where you go on "tilt" so to speak and try to make up gains lost in a drawdown all at once.  That usually just makes things much worse. 

I'll know when things are better for my style of trading and when they are, I'll be ready to go.  When I start seeing stocks breakout and NOT give all their gains (and more) back within a few days, I'll know that it's time to start going for some swings again.  Hopefully that time will come soon.  In another month and a half, I will have some time off work and will be able to watch the market all day long, so perhaps I can trade a little more then.  Overall, however, I stick by my belief that this is a day-trading market only and therefore will keep things very light.

I still go through my scans each night and usually do go into each session with a few names on my list, but very few trigger in a way that makes me want to dip my toes back into the water.  My market timing score has been at negative three for most of the past week, telling me that this isn't a great market to be playing longs in anyway.  I do try to update that timing number to any of those readers that are interested, so at least that part of the website is up to date. 

A few random observations to wrap this thing up.  I still don't see many traders talking specifically about their gains or trades on Twitter, which tells me something.  The few that do tweet about their great trades seem to be tweet about 2-3% gains in stocks.   I noticed a post by a very good, well-known trader last weekend (before the market took its huge dump) that showed all of the winning trades passed on to his subscribers that week.  The thing that stood out to me is that this trader was discussing trades that at best gave gains of 2-3%.   This is NOT meant to criticize this trader at all - he is very good at what he does and seems like a super nice guy.   I think from my perspective, it confirmed my thoughts about the difficulty of this market that an excellent trader was saying a "great" week was filled with 2% gains.  Unfortunately, that's what the market is presenting to us.   He wasn't wrong with saying those were good trades - it's just that 2% gains aren't much compared to what previous markets over the past few years have presented.  I know personally that I've had an extremely difficult time adjusting to this and being happy with those types of trades.  Maybe that's why my performance this year has been subpar.   It's been a real grinding market.

I've also noticed recently that of the many bloggers/traders I try to follow and read, the only ones that seem to be writing a lot and sharing their thoughts about this market are the ones who offer paid services.  Maybe I am jumping to conclusions, but I wonder if a lot of traders are losing interest in the market due to the constant interventions.  If you're selling or promoting some product, you need to constantly make it seem like this market is great so that people stay interested in your product.  If you're not, then you can do whatever you want - for instance, sit back and not say anything. I may be way off base here so you can ignore this thought if you want.

Enough of my rant and complaining.  Good luck this week if you're trading heavily right now.  I have a small watchlist of stocks that I am watching on the long side here and maybe some earnings plays will pop up soon like CREE, NFLX, and LNKD from last quarter.  Overall though,  it will take some heavy convincing from Mr. Market for me to get aggressive with anything here.  From a swing trading perspective, this seems to be a market to avoid. 


Steve said...

Mac: Raising my daughter, people would say the cliche "they grow up so quickly". I heard it so much it didn't really sink in. Now that she's a teen ager, I really get it. That window when you have a REAL input into their lives closes quicker than I ever knew. You know where I'm going with this comment (about priorities). ALL THE BEST TO YOU - GOD BLESS - Steve Clemer

Anonymous said...

This is a great post. I have been busy with my full time job outside of trading as well but this year in general 2013 has been difficult bc it has been a slow steady grind higher without much variation. Since it has been hard ice largely taken a leave of absence since Jan of this year.