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.
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(great trading book) – there’s a crazy old trader guy who responds to every piece of “advice” from a younger trader how he should sell now (because things are overdone), and re-establish his long position at a lower price, on the next pullback. The old guy says no, justifying it with a loud proclamation: “It is a bull market!”
This, my friend, is a bear market. So we should just get short, and stay short!