Innocent until proven...

Written last night.... lost internet connection last night so could not post... here it is...
May have jumped the gun on the shorts. In the post "holding pattern" it was written to wait for the 200 or the 50 to be broken. This was a very true and accurate post. There is a lot of risk on both ends until this happens. The SPX finished the days before too close to the 50 for confirmation of a breakdown. So anyone long or short in any except a few stocks was gambling on this week's economic data. If the data on Fri. is unexpectedly bad the market will turn right back around. Knowing what to do and listening to your own thoughts... not always the same...

Here are the rules...
A trend is innocent until proven otherwise
Support and resistance are innocent until proven otherwise.

True on the SPX bounce off of the 200. True on the bounce off of the the 50. True in general.
It is tempting to jump the gun... get in too late the move may have been missed... but get in too early and you may be wrong... I made a mistake by getting in too early as I violated another rule...
Never step in front of a bus...

The strong econ. data was not something to jump in front of in market uncertainty.

It's better to miss part of a move and not gain then to be wrong and lose some... Lesson learned... take it from our Prez...
Fool you once... shame on you.
Fool you twice... you can't be fooled again...

If I make a mistake I admit it... the real mistake is making the same mistake twice. Even if the markets had fallen I would admit the mistake... jumping the gun is so easy to do... so hard to avoid... I've read many many people did this. Many people were short in anticipation of a break through the 50... which caused a squeeze today...

I haven't sold my shorts... if the SPX breaks convincingly above the 200 I will. I never got into DUG... as I mentioned.. which was a good idea as oil prices and oil stocks reversed quickly...
at some point the DUG will be a good play... let the charts prove this though...

If you have jumped the gun before (long or short) remind yourself of this mistake as well... only the most disciplined and trained avoid this... and I will be more disciplined for sure from here...
with these earnings reports coming up and a position between the 50 and the 200 on the SP; mixed signals with the Dow 30 going down before today but the Naz going up... best to stay out of the market except for the strongest names in secular bull markets.
POT is one of those names...

Also as confirmation of the overall market trend it helps to look at the longer term chart of SPX... which shows that we are between the market top and recent bottom...closer to the bottom...but not if Ben hadn't stepped in (bottom would have been much lower)... a place of uncertainty influenced heavily by news... I'm sticking with long term secular plays after I either stop out or trade out on rebound from the SRS and SDS shorts I have... fundamentally they are holds but without technical confirmation I won't hold these...

Here's the charts...





This blog is for informational purposes only. It does not give investment advice.