Unless you are holding a short position in the general market as some sort of hedge with an exit strategy, be advised, the market is in an uptrend making new highs, with all stock holders being winners, so you should not be short.
The SPY is at all time highs. That means everyone who owns stock is a winner, worried about losing their new found winnings, and hence the cliche “the market climbs a wall of worry.”
The incredibly boring market action over the past few trading days will likely resolve to the upside. This is a textbook low volume consolidation following a breakout move.
I am adding to selective long positions during this period.
My short position is ready to be ditched with an automatic sell to close order if the SPY gets above 217.03
How interesting that the market is going higher despite the events in world politics, economic developments, global terrorists threats, etc.
Was it foolish to exit long positions when the SPY broke trend post Brexit? I don’t think so. Buy and hold advocates are bragging now. Good for them this time. But the market does not always bounce back to set new highs.
I had no way of knowing if the market would continue lower or stage an extraordinary turnaround like it did.
I am not able to predict the price action of the market. I can observe and participate in trends with an exit strategy for all purchases.
In terms of an action plan, I will overcome my fear, buy good stocks or just buy the SPY.
Stop out below the most recent low of 198.60 on the SPY.