Splash Zone Weekly Wrap Up: 6/12/16

Last week was one of the tougher trading weeks we’ve seen this year. It was the classic, “stairs up, elevator down” move for the market. Essentially the last two trading sessions wiped out nine days of upward price movement. 

1. That is why I have been seeking to book profits along the way when we get them

2. If you don’t do it, you have simply a sea of losses that you’ll spend the rest of the month trying to recover from. 

3. That is why I have been so hesitant to get a heavy long portfolio in recent weeks.

For us, we simply have to peg the market’s direction going forward and we are in a situation where flexibility is on our side. It was very important for us to add QQQ on Thursday as it helped to buffer the losses on Friday, as did a couple of our day-trades. None the less, I prefer less days than what we experienced Friday. But looking back at it, I think we handled the day as well as any one could have and how we adjusted to the market and sought to position ourselves in the best way possible. 

Going forward the market is showing concerning weakness in the one area you don’t want it to show weakness – above 2100. Instead the bulls really need to bust through new all-time highs, but instead it is going down the path previous rallies have gone down and that is to top before it ever establishes new all-time highs. 

The way around it for the bulls is to rally back above 2100 and through 2138. But that will be difficult with the summer months ahead of us, and fears of a brexit looming on June 23rd. 

Either way, we are positioned to take advantage of strength or weakness and to profit in the process.