Value of Perfect Information

*I blocked out my position size because I’m still in it.

 

All other analysis aside:

Since last Thursday’s crash not all tools/algos have yet to fully recover.  I’ve spoken to quite a few traders and few are experiencing similar occurrences.  Many have expressed an aversion to actively trading the current market.  Last Thurs. has clearly produced a lot of collateral damage.
 
What’s working: 
Trading the opening range(s) sparingly
Allowing the stock to drop through support before getting long for quick scalps 
Rumors
Shorting bounces within down-trending stocks (duh’)
Trading multi-day Ranges (with reduced targets) when the broad market is otherwise chopping sideways
Identifying (even) macro themes
Reduced position sizing and increased pre-trade discretion.
Gold & Silver related instruments 

What’s not working:
Risk
Trades that require a more two sided market

How about that! We got to 1180 which was my prediction for the end of this bull run back in July 2009!

I mentioned the 1180 level originally back in July 2009 to email subscribers to my newsletter!

http://www.bostonwealth.net/2009/10/04/when-will-this-bull-run-end/

This is what I said back in July 2009, a distant 9 months ago!

Back on July 28, 2009 I sent out a newsletter to subscribers stating the following:

“Finally!!

The S&P 500 200 day moving average increased compared to the previous day’s level for incredibly the first time in a year and a half! This has been one of the worst and longest streaks of consecutive days with a declining 200 day moving average and tonight that streak has come to an end!!!

For all the naysayers out there who have been saying that this rally is not for real and that a confirmation signal was missing because the 200 day moving average was still declining, well that theory has now been negated!

Following the end of this streak in the past, going back eighty years, the S&P 500 has averaged a return of an amazing 20% during the end of the prior five worst streaks; you can take that to the bank.”

So back then in late July 2009 the S&P closed at 980 and went up as high as 1080. A 100 point increase in the S&P 500. However applying the historical data mentioned above, the end of this bull run should occur at 1180 which would be that 20% historical gain!!

I don’t know for sure, but history seems to be on the side of a continued bull run!

http://www.bostonwealth.net/2010/01/10/the-1160-level-is-where-the-sp-found-initial-support-after-the-lehman-collapse/

And above is where I mentioned the 1160 level:

Over two month ago, I stated the following in an exclusive article I posted over at Slope of Hope:

Why I see 1160 as an important level and hurdle to overcome: The 1160 level is where the S&P found initial support after the Lehman collapse. This former area acted as support, and should now act as the final front or resistance for this juggernaut of a bull run

This Slope of Hope post is back from November 2009

http://slopeofhope.com/2009/11/is-history-on-the-side-of-the-bulls-by-boston-wealth.html

…and this after nearly nailing the bottom in 2009 from October 2008!

http://tinyurl.com/yldaczx

Nothing like going out on top and being correct and saying that you were the best analyst to yourself!!

But hey wtf do I know.. as many have said to me or prospective subscribers or clients.. if you are so good, then why do you need to have a paid site or worry about other clients and need to manage their monies or heck even our money?!Answer: Good question!  I don’t!

Seriously thinking of retiring in Jan. 2011 as I turn 50!

I’m not a big fan of scalping ETFs but XLE today was a real nice trade.  The market opened with a stronger USD and weak energy sector.  I started perusing my energy watch list and quite a few were looking somewhat scalp’able.  However, the market had just opened and I didn’t want to commit to a position until I formed an understanding of how the morning’s trade was likely to develop.  So, instead of trading individual names in the energy space, I found XLE to be the better instrument to capture the opportunity. 

I’ve spoke of this pattern before (most recently with a JPM trade).  Essentially, when the market (sector) opens down but does not see follow through selling but instead chops sideways, I look to scale in for a quick pop after the congestion has demonstrated an unwillingness to sell off.  This usually takes 45min to an hour.   Provided you balance your analysis with other indications such as $TICK (see below), Core Sector & Major Average performance (*from the open), market internals, etc. ; these little low risk trades often add nicely to the day’s P&L.

Please Note: Charts are set to PST time zone