Yesterday, I deduced our stock market would go up. BAM! Wrong!
And that is the way it is. Without the benefit of crystal ball, we are all subjected to the whim of the market mood and sentiment. With fiscal cliff in sight, hope is lost. Without hope, the market may lose the will to sustain the uptrend.
Price action has spoken. SPY took a tumble and broke through the breakout line by a good margin. Without hesitation, I dumped my swing trading positions pronto. I sold ES, GLOG, NOK, RIMM, SZYM, UCO, & WPRT without looking back. Some of these position bounced back a bit after I dumped and some went further south. Basically, I do not try to second guess my decisions after I’ve executed them because I know that by following price action, I should be “OK” on average .
Now is not the time to think, it is time to watch and see if this down day has leg or not. While watching, I’ll prefer to stay on the sideline and sit on my hands. Yes, I’m tempted to do some bargain hunting but I must respect the price momentum for the day.
Currently, SPY bounces off the support line created by the Dec 14th low and is now holding a green bar. Yet, it is still a gap-down day.
Below is the SPY daily chart:
Can the Dec 14th support hold? Well, I don’t know so I will wait.
Meanwhile, I’m still holding my position plays (AMRN, LRAD, USU, and EMAN) and 60% cash. I did not hold SZYM for position play because it has a tendency to drop like a rock without warning. Oh well, so can many other stocks… but SZYM more so than others is my justification.