On cue, right after we proclaimed the S&P 500 was unable to stage a sustained rally – the S&P 500 did the unexpected, and staged a somewhat sustained rally.
So here we sit at 1091 – some 41 points above our initial short entry (doh!). It’s a bit of a shame – this is the rally we were waiting to short:
Oh why must you toy with us, Mr. Market? Because that’s your job – that’s why. Well played.
(Source: StockCharts.com)
So, either we “got too cute” on our timing – ie. we were early – or, we were wrong, and the bull market is still on.
Judging by some formidable looking resistance around the 1107 mark, we’ll withhold panicking (and looking at our trusty futures trading account), and go with “early” for now.
Worth noting – this gaffe could have been prevented if we’d stuck with our very original S&P short position at the 1115 mark. Sure, we closed that with a profit, but the question is always – when do you get back in?
Just goes to show – if the intermediate to larger term trend is going your way, it’s best to ride it out, rather than to get too cute trading in and out of a position.
Reminds me of a great line from Reminiscences of a Stock Operator
This, my friend, is a bear market. So we should just get short, and stay short!
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Looks like this rally has some legs and might go further along upwards.
Should we say lets cover the sorts or double down at this point?
If you think it’ll go down further, what is your basis?
I think we hold right here. I am against doubling down on a losing position, so while I think this is an attractive short entry point, I can’t violate one of my primary trading maxims: “Cut your losers short, and let your winners run”
I don’t think this rally has much left, for what it’s worth.
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