A solid week of trading despite a market that refused to go anywhere, which has also been the case for the past twelve trading sessions. Friday’s move gives a glimmer of hope to the upside, but as has been the case statistically, when July is very strong, August can come in weak. While we are trading at new all-time highs, we also have to keep an eye on the fact that a market correction could come at any time and as is always the case with trading, we have to be ready to trade a change in the tides. That hasn’t been the case just yet, but it is important to be prepared.
We sold IBB on Friday for a nice 5.3% profit. It was a clean and steady trade that had consistently rose for us. Had SPX managed to establish new closing highs, I would have been pressed to hold it possibly longer, but with us still range bound on the daily, we have to make sure that we are still booking profits where they present themselves and where trades start to become overly stretched in a flat market and if the market can’t break out of this range to the upside and does the opposite instead, biotech will likely be the industry that sees the most volatility.
Nice runner on Friday in PII as the stock started to get squeezed in the afternoon, we’ll see if we can get continued follow through here on Monday. Amazon trade was finally closed and finally decided to have its pre-earnings run on the day of earnings prior to its earnings. It wasn’t as clean of a trade as I would have liked and wanted to see a bigger run heading into the report over a longer period of time, but it was still a profitable trade and that is ideal in itself.
If the market can expand this week out of the current range, and it is close to doing so if it can build on the last two days of gains, then slightly more exposure will be in order to the long side. If not then I’ll be looking to flow with the low-volume back and forth that we have seen over the two-plus weeks.
Either way, August is always an interesting month, and it is upon us now. So lets get ready!
