Splash Zone Weekly Wrap Up: 9/4/16

No matter how long you’ve traded for, and for me it has been in excess of 20 years, you always experience something new, that you have never seen before, and the consolidation of late, might not seem overly unique on the surface, but when you consider that since 1928, there has only been 6 months that has experienced a tighter range, then yes, you are experiencing something fairly unique. 

I think the way we have traded this market is literally the best way we could possibly trade it. Is it exciting? No. Does it make you wake up in the morning feeling thrilled about the day ahead? No. This is one of the most boring markets you’ll ever trade. Getting through it and into the next trend that presents itself will be key. The ideal direction for this market would be to the downside. The market is clearly exhausted, and if it can break out to new all-time highs, I think it will be much of what we have seen during the months of July and August – nominal new highs – nothing to really speak of. September marks one of the worst months for stocks, if history is any indicator, then we could be setting up for some nice opportunities to the downside. 

Continuing our mix of long and shorts in the portfolio will continue until there is a clear trend in place that we can profit from. This allows us to benefit from the fluctuations that the market is obsessed with. Best example of this is our profit in Adobe (ADBE) that was booked on Friday. 

As always, we constantly adjust to what the market throws our way, preserve capital, manage risk, and let the profits take care of themselves.