Recently, I had a number of small consecutive losses as I kept trying to go long while the market kept sliding lower. Even if it has been work with no pay, I will keep doing it as long as my indicators and my intuition suggest I should go long. It is good to always remember that this is how this business works. The market will never make it easy for anyone. The important thing is to manage risk by keeping losses small and be consistent by entering all trades that meet the required conditions. In my experience, this is the only way to beat the short term market noise.
So, I will say it again: the market is oversold by many measures and still in a bull market. As long as indicators do not reach bear market levels, I will continue to go long or stay on the sidelines.
Here are some indicators I watch that favor the long side, courtesy of StockCharts.com:
> NYHL (New 52 week highs-lows) is oversold and also suggesting internal strength.
> VIX
> S&P 500 percent of stocks above the 50 DMA
1 comment:
Adi, thanks for the update! Yes, I totally agree what you say. I have been stopped out for many times, butlosing just part of this game. Meanwhile, the Bull bus is too full since everybody is looking for the bounce...so I guess market just refused to obey traders' will. But overall, we will see the bounce.
Tony
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