The market is catching up today with a snowballing sort of fall that has the market down 63 at 4070, just after 2 pm. The overnight leads were flat to down.
I'm pretty pleased with how I've been going and although it's a tad frustrating that I decided to close out shorts in AWC, FMG and WSA last night, I've been over the trades and I don't see that I should have done anything different. I may well reinstate a short in FMG on the close, now that it's showing signs of breaking down out of the triangle.
The main thing that I can improve is to run things. My plan is to take half a position off at a target level which might range from 5-6% on a 4 to 6 dollar stock to 10 cents on a stock priced between 50 cents and 150. The other half is supposed to run until the trend shows signs of pausing.
In three cases over the last week, I've failed to let that happen and missed out on some easy money.
The first exhibit is PRU. I closed out the last half at 301 last Friday. I was planning to use a trailing stop or a reversal and that would have got me out on yesterday's close (reversal day) or the break of yesterday's high this morning. Somewhere between 285 and 290.
The second case was OST. I was worried about a bounce back on completion of the BSL issue but there's always something to worry about and a smarter move would have been to be very watchful, and the fact is that I had already taken off half the trade and booked some profit so the insurance plan was in place. This has continued to fall and is down a further 5 cents from my exit level.
The last one is ALK. I bought half back at 99 this morning and that was fine. I'd shorted at 108.5 so it was close enough to my 10 cent target rule of thumb. I then decided to buy back the last half at 99. The stock is now 94 and my motivation to buy back the rest was traders' god syndrome where you decide that this is as far as a stock is going without waiting for any firm evidence.
I'm doing better with running my positions and enjoying it and this is encouragement to leave well enough alone and let the market do the work.
In the meantime, I've had to stop out of SEK. It's fairly well supported but through my level. My remaining positions are two shorts, one in ALL and one in IAU. They're both doing pretty well. Here's ALL.
The IAU daily chart is below.
4.11 It was a panicky afternoon with Chinese PMI figures helping to pull the rug from under Australian resource shares. The market finished at its worst with a loss of 2%.
I put on the short in FMG at 460. I was hoping for something in the low 470s and that's the issue about waiting till the close to transact when the signal is already triggered. But there are plenty of occasions when the reverse happens and you avoid a few dud trades too. Fairly typically with this sort of compressed pattern, you get a strong breakout and I'm hoping for a quick sell off.
I'm short TLS at 312 on the basis of a lower high at 320 and a 1-2-3 sell signal if the stock trades at 311. My stop is at 321.
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