My Trading Strategy Going Forward

by Ryan Mallory

It has been unbelievable to watch the performance of the market of late, and if you are a bear still to this day, it is  probably one of the most  painful things that you have ever gone through. Now, I was only short for a part of the rally up, and I can tell you, from a personal standpoint, that it was an incredibly tough experience and not something I hope to repeat any time soon.

As it stands now, my bias in the market is to look for long positions that offer the best risk/reward setup. However, there is no way on God's green earth that I am going to completely allocate my portfolio to the bullish cause at this point in time. Right now, I am about 20% vested in this market, meaning that 80% of my cash is sitting on the sidelines. I don't see where I am going to be committing any large chunks of my cash on any new positions as it is painfully obvious this market is extremely overbought and to go long more than I am currently, from a general market standpoint, isn't putting me in a position where the risk-reward scenario is in my favor.

Here are the rest of my thoughts on my market strategy.

This market needs to pullback some - even from a bullish stand point, there is no way that this market can keep going up as it has. And for the bull's sake, the market needs to work off these overbought conditions it is finding itself in and provide some descent setups by giving up some of its recent gains, as I have been struggling of late to find any meaningful new trade setups.

Right now I am holding on to two stocks in Ugi Corp (UGI) and Barnes & Noble (BKS). Both stocks seem to be doing alright so far with gains currently in both. UGI, I have increased the stop-loss in, and will do so again tomorrow, with a stop at 24.49.

So I am going to continue to remain quasi-on the sidelines, if my profit targets are hit in both positions, I will close out half my position in each and then I may add another position to the portfolio. But for me to really add some serious capital to this bull market, it is going to have to pullback some and I think a pullback of some sorts is undoubtedly in the cards sometime in the next couple of trading days. So be on the look out - especially next week as the market may decide to reign in the enthusiasm of the bulls some.