Momentum Book Update

Very quick again this week because I’m still not trading for the most part in this stupid tape.  I did put a note out Friday on this blog regarding the better action I’m starting to see.  I did nothing yesterday though and the market melted up into the close.  It’s all about the path of least resistance, picking bottoms and tops is stupid, although nice when it just happens to work out that way.  I play for the meat of the move, there’s no point in trying to be a hero.

I lost some alpha this week as the market bounced off some very oversold levels.  I closed out my last remaining 1/4 short position in the retail etf $XRT on Tuesday as it was only pennies from my target.  Looking back, there was a lot of money to be made on the short side over the past 6 or 7 weeks, the setup was there, and with the alpha that I had generated on the way up, I probably should have taken a bigger whack at this market on the down side.  I’ll live with two very nice trades in XRT and STD, and the great alpha I’ve created on the downside.

Stay nimble, anything can happen in this market, I spent much of yesterday trying to get my head back in the game.  If you’re a swing trader, you know that sometimes it can be very difficult to switch gears in terms of direction.  I struggle with this more than you would think, it takes me longer than I would like to be able to accept the fact that the market has changed, and that I should be looking now in the other direction.  It’s a strange thing, because I have no reason to be bias in one direction or the other right now as I have zero exposure to either side.  Now, there is always exposure to losing alpha as the market takes off to the upside without you when you have no long exposure, but alpha is the least of my worries right now as I have built a ridiculous lead on this market.  I have no reason to chase the price action up on an oversold bounce.  But I find myself grinding the gears so to speak right now, I need to take the weekend to just flip through a lot of charts and get a feel for the overall market again, throw off any bias I may have, and come into next week ready to get long, or not.

We are at an important juncture here, keep an open mind.

Nothing that I say or show on this blog should ever be considered investment advice or a recommendation to buy or sell any security.  The performance numbers that I post in the momentum book should never be regarded as representative of any specific client account managed by Surfview Capital, it is there solely for educational purposes and should be treated as such.

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