The last couple hours my focus has been to reduce long exposure to roughly 25 to 30% long. That's down from 95% long last week in stocks. That was a lot of selling over the past couple of days. If our timing is reasonably right, we should see some profit taking take us lower within the next week or so at most and then we can consider adding some positions back if it makes sense at that point.
The concern I have when looking at my charts is that despite this run higher, it has come on weak internals and so-so volume of late. We are also seeing more thrashing which is typical when you reach a point where the buying and selling are more even in size.
Probably the hardest thing to do when you are trading is the exit. The entry is easy as you are not taking a loss or a profit upon entry, your slate is clean. The exit is more difficult as you are taking losses or profits with the losses being the most difficult to stomach yet the profits seemingly just as difficult to take because there could be more to come. It's rather common to see one sell a stock and a couple days later seeing it skying higher. That's the nature of the beast. What you have to tell yourself though is that there are always opportunities and that the one you let go of wasn't the only one.
When a stock gets very extended, trimming or removing it is prudent. Book your gains and set an alarm to buy it back on the inevitable set back. Taking profits on the way up is a sure way to outperform the market. Doesn't mean you have to sell everything but parceling some out here and there at peaks, not valleys, is the key to the gains.
Market has come in off that opening high. We are bouncing around a bit as we reach a support line intraday on the SPX. Tech is weak and putting pressure on the market. They squeezed that higher early but that squeeze looks to have played out now. I'm looking for further pressure to develop.
The concern I have when looking at my charts is that despite this run higher, it has come on weak internals and so-so volume of late. We are also seeing more thrashing which is typical when you reach a point where the buying and selling are more even in size.
Probably the hardest thing to do when you are trading is the exit. The entry is easy as you are not taking a loss or a profit upon entry, your slate is clean. The exit is more difficult as you are taking losses or profits with the losses being the most difficult to stomach yet the profits seemingly just as difficult to take because there could be more to come. It's rather common to see one sell a stock and a couple days later seeing it skying higher. That's the nature of the beast. What you have to tell yourself though is that there are always opportunities and that the one you let go of wasn't the only one.
When a stock gets very extended, trimming or removing it is prudent. Book your gains and set an alarm to buy it back on the inevitable set back. Taking profits on the way up is a sure way to outperform the market. Doesn't mean you have to sell everything but parceling some out here and there at peaks, not valleys, is the key to the gains.
Market has come in off that opening high. We are bouncing around a bit as we reach a support line intraday on the SPX. Tech is weak and putting pressure on the market. They squeezed that higher early but that squeeze looks to have played out now. I'm looking for further pressure to develop.
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