I wrote a couple weeks ago about being long to the hilt''and for the most part the market has remained pretty healthy. All the picks highlighted in the post have performed well, although that is simply a function of getting the market call right. However, starting last week, I started slowly getting stopped out for profit on most of my positions and also had a few new trades fail. I also have not been finding many setups for my trading style over the past week, even before last Thursday’s move in $SPY. This is in stark contrast to my August performance, so it makes me stop and pay attention.

While it may be frustrating to miss a strong day or two in the market, it is important not to chase market performance and try force a trade. Many traders fall prey to overconfidence after a strong move and get ultra leveraged well into the move. The market is still healthy, but it could stand for a few days of consolidation or pulling back in order to let equities take a breather. I find myself only holding a couple partial positions after being on margin several weeks in a row, and who knows, maybe I miss a move. However, most setups are too extended for my taste and I’m more than happy to sit and wait for my pitch.

Good Trading,

Joey