Everyone is a Winner

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.

 

 

All time highs? Go Figure.

The SPX (S&P 500) and the SPY seem destined to climb the wall of worry and rally to new all time highs and possibly beyond.  I have no idea why, but I really don’t care either.

I am building up my short ETF position this AM in anticipation of a final battle on the top of the mountain.

After that, I will just go with the trend.

If the market rallies higher, the only thing that makes sense is to join in and get long, longer, or very, very, very long.

If it rolls and fails, the only option is cash or short.

Simple.

Now, do it.

“And It’s Gone.”

It would be nice to feel good about your financial plan, wouldn’t it?

Professional money managers point out that the stock market goes up over time, and with the power of compounding, you will make the most money getting in and staying in the market.

If you need, or want that money, it is pure luck if your timing is off.  If the market is in a multiyear decline when your money is wanted or required, you may be selling low after buying high.

Yet, if you play it safe and stay in cash all the time, your wealth does not grow.

What is a person to do?

After being burned by financial professionals who really do no better than just any old index fund, I am only comfortable with a personally managed, active strategy.

I have no idea what tomorrow will bring.  But, so what?

Follow the crowd in the market and stay with the trend.  If you are moving in the same direction of the market, and keep plenty of cash in reserve for opportunities and a hedge, you can grow your wealth and not fear what tomorrow may bring.

Once again the market is at a key level.  If the market marches higher, join in the rally and buy stocks or ETFs that are moving with that trend.

Here is a  frustrating truth.  The market never makes sense or does what you think it should.  Get over it.

If the market rolls over, raise cash and get off the slope of hope.

It is a simple plan that works.  Alternatively, you can give your money to a professional to run for you.

This guy comes highly recommended.