Don't speculate or predict what the market is doing, have a Strategy!
Whether you're an active daily trader or a long term investor you have to take a look around and take note of what others are doing within the arena in which you work. Over the last 4 months we have been seeing a lot of our peers making stock calls to keep their customers happy, when professionally they knew they should have been sitting on the sidelines waiting for the setup/trade to come to them.
Philip & I professionally study the market and the market sectors on a daily basis to understand the market profile we are in. We do this to fully understand what percentile of capital we should be using and what the potential risk and gain we are likely to return. Studying the market sectors gives us a more accurate positioning when entering and exiting the equity.
These last few weeks we have seen a lot more speculation and predictions from other like minded traders. Philip and I often say that we are not in the fortune telling business and that we just focus on the facts in front of us (Chart Analysis) which has kept us focused on the job in hand!
The first part of September saw a bounce point in the sideways price action of the SP-500 which gave us a heads up that we could see a reversal from the lower support in the sideways price action. We have been suggesting for a while that our overall analysis of the market has been to the upside. This gave us some great risk to reward trading opportunities that we took advantage of. We then also highlighted to our free members not just to go short at the top of the trading channel (SP-500 1130.00) but to wait for confirmation that the top of the channel will be rejected or potentially be broken to the upside before doing anything. This would mean being definitely ready on the sidelines for the opportunities that presented themselves at these significant areas. This is where we added to the positions that our members had already been taking full advantage of.
For the past 3 weeks we have been lightening our positions and we are not adding any further positions to our very successful endurance portfolio till we see a better risk to reward scenario but we are still holding the last positions we have for this up move for possible further gains before some expected pullback in the market.
We highlighted a week ago, in the members area that we were lightening up even further on our Rapid Portfolio position sizes and in addition to that we are not initiating any new Endurance trades due to the extended price action we are seeing in the market. This is not to say that the market can't go up but with such extended price action on the daily we feel the risk to reward is no longer in our favour.
There have been a few days over the past few weeks that have been a bit volatile in the stocks due to the earning season. Even if you're not a member of Stock-Market-Strategy, we urge you to pay attention in what can be a very intense period to trade and remember to have your stops in!