I'd placed my bets to the short side over the last few trading sessions as there was no decent pullback to buy and the upswing had taken the market back towards the top of the recent range.
Yesterday was tricky because the market recovered to a new swing high but today the strategy is paying off. I'm hoping for another day or two of market weakness like we had in mid and late August.
It's worth thinking about yesterday because out of 9 short positions held by myself and my assistant, we only had to stop out of 1. Previously, I would have spent the day agonising over every tick and persuaded myself to pre-emptively stop out of a few more of the shorts but this time I kept away from the screen and only checked hourly to see whether I needed to buy anything back. Mentally and emotionally I had accepted that the day was going to be unprofitable and I didn't try to fight that reality by trying to scrape a few dollars here and there or reduce the prospect of further losses by stopping out prematurely.
The market has not made a clear top so I'm aware that the positions may still need to be cut but that possibility is quite low after a couple of minor highs with no follow through just below previous resistance and a decent reversal day so far.
I didn't expect to get the opportunity to short anything more this morning but TOL was one of those stocks which didn't gap down. This is partly because it's charting better than many of the resource stocks but it still seems worth a go with a tight stop above yesterday's high at 480 and an entry level of 470.
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