A subscriber asked about whether I covered my bear positions based on today’s open and the trend line breaks as I noted I would. The answer is yes, win some lose some. I also believe today is what we technically call ‘b/s’, but a rule is a rule. Live to fight another day. In fact, it’s the first rule of trading or it should be near the top of the list, anyway.
I’d expect this rally to fade, either in-day today or into the FOMC but that is just the point. I was out for much of Friday and did not square things up in the speculation portfolio as I’d have liked going into the weekend, with FOMC week hot on its heels.
As such, I have reduced risk by raising cash in the precious metals stock sector as well (some items were sold, with items I consider ‘key’ retained). Since I am not going to short metals with such bullish CoT structures and am uncomfortable with DUST and put options on miners, cash – as is often parroted in this space – is the answer. So much of this game comes down to quality of life and I’ll personally be damned if I am going to let whatever the FOMC cooks up this week – and the market’s interpretations – interfere with that. I’d like to increase positions again when we have more clarity.
Cash is now a more comfortable 77% in the speculation portfolio. Here I’ll remind readers that until such time as I become an excellent trader (don’t hold your breath in this environment) NFTRH will not feature any kind of trading recommendation services. There was a time when I thought this might be viable, but the environment – as volatile and emotionally driven as it is now – has only pushed such an idea out to the realm of highly unrealistic.
So we’ll continue to make sense of the macro situation as best as possible as that is our charter, our mission. But I again remind people to please not trade what I trade because I happen to be trading it. I have been anything but a good trader of late. I have been a good risk manager and that has been the sum of it.
Let’s see what the FOMC brings us this week. A previous post this morning shows its bemusement with a Marketwatch writer’s assertion that since QE has not worked to the desired goals thus far, it should remain in place. That is lunacy in my book, but some questions should be answered by Wednesday afternoon as to whether Bernanke is going roll over (QE indefinite) or perhaps throw a new and more complex wrinkle into things, keeping alive our ‘taper to carry’ theory.