Lessons

1. If VIX is under 26, buy the dip. If VIX is over 26, sell the rip.

2. Always trade in the direction of the larger trend. Find the strongest trend in your time period.

3. Nothing as bearish as a failed breakout. Nothing as bullish as a failed break down.

4. Don't worry about the last dollar. Take your money and go to the beach!

5. No more than four positions at a time. Preferably 2-4. Scope out others. Pick the strongest.

6. Buy the strongest; sell (short) the weakest.

7. Nothing is guaranteed. Nothing.

Friday, April 23, 2010

Friday AH

80% short now. Just one small long left, in a Silver stock (PAAS), which I will drop on Monday.

1. Bought GS Puts earlier at GS 158.

2. Entered BGZ at 12.25 AH.

3. Entered FAZ at 11.11. This is a swing trade. Market may go higher but I think risk-reward is good here.


Update on Saturday at 11:22 a.m.:

I may sell BGZ, in view of my earlier analysis that we are setting up for one more move up to at least 1220-1230 on the SP 500.

I'm pretty sure I will get good prices on my FAZ, if I choose to sell it and on my GS Puts, although I will only sell these at a profit. The spotlight will be on financials next week, and I think they will struggle.

I think that bulls have made a point by closing above 1200 SPX on four consecutive days. The point is this: 1200 resistance has likely been broken.


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