Splash Zone Weekly Wrap Up: 5/27/16

Where do you begin to make sense of this week, much less of this overall market. It is why I am a fervent believer in being aggressive with the gains that we have in hand and in terms of closing them out. That won’t always be the case. I, more than anyone enjoy letting a swing-trade run 20-30% higher, but you need the right kind of market in order to do that. 

I can’t just sit back and say, “I hope the market gets its act together and finally breaks down through key support” or say “This time I am going to let my positions ride because we are going to make new all-time highs.” This type of attitude is why traders are getting destroyed by the market in 2015. Heck, they are still trying to make up for January/February losses, muchless ponder what happens if  the market hits new all time highs again. Fortunately, that is not the boat that we are in. We definitely had a rough first two weeks of the year, and a lot of that has been to adjust to a new market environment, and I’ve taken the steps in the future to identify change better, and to react accordingly. Based on my track record over the past few months, I believe that it is evident I have achieved as much.

We came into the week positioned short, we’ve concluded the week positioned long. That has been the story of this year. At this point, I want the market to make new all-time highs. It would make trading far more easier if it would. Otherwise, while we remain stuck in the 2040-2138 range, I will continue to book the gains aggressively. If you don’t quite understand why I would think like that, just look at the price action inside this area over the past two years. It is historically tight and choppy. It would have been far better at the start of this week if the bears could have driven price and kept price below the 2039-40 level. Trading would have become much more bigger in terms of the size of gains realized once that support level was taken out. But it wasn’t meant to be.

Going into June, history suggests it will be bearish. But until that happens with price action, I’ll keep my remaining long positions and even add to them if the market allows for it. You have Brexit forthcoming, and you have another FOMC meeting. As has been the tradition of recent years, the summer time is there to fret over the European Union and its future existence and I expect no differently in June. Our job is to be flexible and go where the market wants to take us.

I’m looking forward to another solid month of trading with you all.