SD-2020 TRADING WITH THE TIDE

[ira85]

That sounds like some excellent stock picking!! You sold FEYE and it kept going down after the sale. Good. Then you added to your ARKG position and its going up. Ditto for your other ARK funds, all going up. Others you own are going up, SKYY, GLD, BND, VCLT, VXUS, VTI, and ONE bond fund you own went down a little, BNDX. Depending on how many ARK funds you have, it looks like you have about eleven winning positions and you are on the wrong side of One trade. One loser and 11 winners. Smokin'!!

Your success undermines the excuse I had for not getting anything invested yet. I was going to say the broad market as reprsented by the SPX, had not yet convincingly broken out of its sideways range and I was holding off buying to improve my odds that I wasn't going long with the broad market still trendless. But it looks like the sideways action of the SPX the past 7 weeks isn't hurting you. I'm taking the day off Tuesday to go to Manhattan. The one in Kansas, not New York. I've discovered I like being retired. I get very little accomplished. I hate to think about how badly I would do if I tried to go back to work. I'm terribly slow. I'm putting together a gas grill. I have about 8 to 10 hours of work on it so far and a long way yet to go.

The US has a long and interesting history of civil disturbance. There have been riots over lots of issues, including the military draft in the civil war, protests against political and economic globalization, and one caused by an electrical outage. But the death of a black man at the hands of a white police officer has become the most consistent central issue for civil disturbances in America. In the past few days there were several situations where peaceful protesters broke ranks with rioters. Maybe that will be a benefit to come out of this. Just about everyone agrees burning down homes and businesses in a neighborhood mostly hurts the people who live in the neighborhood. Looting doesn't support the goals of the participants in the disturbance. Maybe community activists can work with political leaders and identify strategies to help prevent rioting and looting. -ira

[sd]

"That sounds like some excellent stock picking!!
Your success undermines the excuse I had for not getting anything invested yet. I was going to say the broad market as reprsented by the SPX, had not yet convincingly broken out of its sideways range and I was holding off buying to improve my odds that I wasn't going long with the broad market still trendless. But it looks like the sideways action of the SPX the past 7 weeks isn't hurting you."

It's not so much excellent stock picking- as it is trying to select from sectors showing ongoing strength- and trying to stay clear of many "value" plays. Just riding the coattails of a market that is willing to go higher- The $SPX is actually trending higher the past couple of weeks- small steps but some sector segments have really pulled the index higher-
Largely in Technology and Healthcare- - but note the performance and the chart of the SPX or SPY- For the past 12 days , it has incrementally continued to make closes above the rising 5 ema-
and progressively moving higher. Comparatively, some narrower sectors have contributed to this rising performance-
I do want to point out that the 5ema as a line in the sand seems to work well in trending markets, but gets whipsawed with wider volatility - so view the charts with some analysis as to how volatile the prior price action has been- As you could tell viewing the $SPX, the volatility has mellowed -

Nothing wrong with sitting on your hands and not engaging at the present time- Hard to rationalize how this market can continue to ignore what will be a rough 2020- including elections.
My recent paper profits could easily roll into the red- but I hope to get stops up to the Break Even before that event.
I'd try to post a chart link, but continue to have some computer issues- Will try to get this sorted out-

Enjoy the Grill! I prefer charcoal- and mesquite chips , but any sort of grilling beats cooking on the stove!

[sd]

6.3 BA breaking out of the range today- Added to the position in the trading account.
Also looking at BRK/B- finally starting to show some upside.Not buying it- buying Vanguard funds today- Growth, real estate, small caps, Intl.
Added to VXUS, VGT, added VOOG, vnq, vone,
Cash position reduced to 47K-= 75% Now in the market-
I find the strength in this market -widespread buying across the board despite the political , and social distress that is ongoing this week.
This has prompted me to lower my guard and step in further-
BA- i.imgur.com/rqDcLe8.png
BA is similar to many stocks that have a large sell-off- They attempt a 1st snap back rally , and that often fails to hold, and then decline again-
In this instance- With BA in the news associated with the SpaceX shuttle program, I took a look and saw that it had already made a decent upside move, with the price finally getting above and leading the emas to up cross the declining 50 ema- Also, the series of prior green bars looked promising- and a step up higher had occurred.
With today's strong move higher I added 50% to the position earlier in the day-

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[sd]

Well, I should have raised a finger to see from which direction the wind was blowing! Market indexes in the red today, but BA up an additional 7%- We'll have to see if the markets are finally going to succumb to the reality of the situation- Needless to say, my new adds to the other positions will be at the highs comparatively- and so I'll need to consider keeping some of the recent profits by reducing positions.

[ira85]

Congrats on catching BA's big move up this week! Sounds like you put the pieces of a puzzle together, especially the current chart action and the positives in the news with SpaceX. Nice. You commented about the strength of the market given the challenges. I have been amazed and befuddled by the market strength. It seems everyone agrees corporate earnings will go down for an unknown period. Debt which is already astronomical will shoot higher. It seems the promise of unlimited stimulus is what keeps the market going. Or maybe it's interest rates. With rates so low there may be no where else to invest than in the stock market. Stock dividends may be higher than bonds. So stocks get bid up higher and higher as if earnings and debts don't matter? Sounds like a Ponzi scheme. I wonder if the number of bullish gurus is a contrary indicator signalling trouble ahead. And having already used unlimited QE the Fed might not have another trick up their sleeve. The current bullishness seems to assume the worst of the virus is behind us. If there is a round 2 with the virus I think things will get ugly.

And speak of ugly its hard to see how burning your company's office does anyone any good. I assume none of the employees was hurt. Hopefully it won't result in shutting anything down. I better get to bed. I have to fix a toilet tomorrow. I watched several YouTubes today. It will be 98 degrees here Friday afternoon. At least this honeydo is indoors. -ira

[sd]

I have to admit- While I do as much as I can self perform- Plumbing is my nemesis- A simple repair evolves into 3 trips back to the Local Lowes- and on occasion-
no shower or water overnight! UGH! I absolutely hate plumbing- The Spouse says- The kitchen faucet is starting to drip - I'm good with that because I know it will turn into a major project, shut the entire house water supply down, replace the shut off valve because sand has clogged it from closing completely, the line is plastic and brittle, and breaks , requiring a new segment of line and adaptor- shark bite- from Qwest tubing to PVC .....UGH! Call the plumber!

The BA trade turns out to be an outperformer- up about 25% over 3 days! I'm holding a nice paper gain tonight of $695.00 on a $2400.-- investment-Time to put the stop directly under today's opening low- 3 days of gaps higher- may see a 4th Monday- I also see the gain in the other investments seems to be on the extended level- , so time to consider tightening the stops.....

This pandemic qualifies as a Black Swan Event- see Taleb: Just unexpected, out of the norm, but having substantial disruption/influence on the markets or society.....

en.wikipedia.org/wiki/The_Black_Swan:_The_Impact_of_the_Highly_Improbable

Unfortunately, such events that affect and disrupt- are likely becoming more commonplace as we develop as a global society. Comparative to "Flash Crashes" - both can be devastating to one's financial well being- All based on things behaving as expected ....i.e. normally.

I think that this week simply proves that the improbable can occur, and continues to occur, despite one's knowing that the future is darker than the picture the market chooses to paint today.

Going along WITH the direction of the market Momentum has proved to be the right way to invest-

I actually spent today (Friday) with my wife Fishing on a local lake- and didn't think about how the market behaved today- until we got back home- after hours-
What would life be to not have to consider one's life long savings as essential to one's quality of life once one retires? Or perhaps even earlier?
Perhaps time focused on improving one's fishing would be most rewarding?
i.imgur.com/lB6YH0V.png

Life is short- Take time to enjoy- SD

[sd]

The strong widespread market reaction to push the indexes up +2% , +3% was based on an unexpected better jobs report....The reopenings of businesses across the country adding to the bullishness for the market- As has been pointed out, the stock market is focused on the Future, and not the present reality of millions still out of work and "social injustice " protests, demonstrations declining into riots, looting, and violence in some cities. Will this social unrest eventually become the catalyst that makes the market turn? It seems to be willing to push upwards despite tariffs, rhetoric with China, Global pandemic, US pandemic lessening but likely returning this fall...

BA TRADE:
BA delivered a 3rd Day with another Gap up move, and Closed just above the Open price. I will split the stops on this Trade-trying to allow the trade some room to run higher, yet retaining a majority portion of the profits-
i.imgur.com/c7BijCt.png

BRK/B
Finally is participating this past week - Not a position for me- but it's finally getting some traction as the market's upside is encompassing more sectors and seeking value, not just momentum.


i.imgur.com/qdmgyFr.png

[sd]

The markets closed the week with bullish momentum, some market rotation, and a widening market - So Volatility is reduced- $VIX trending down into the $24 level.
The Snap trade was an entry as price broke through the prior base- Initial stop was below the prior range. Now that price has moved up, the stop can also be raised .
The goal is- by not taking a small gain , I will see this eventually become a larger gain- and so the stop is still wide $17.77 Risking $1 but the stop is below the 20 ema and should be wide enough to be outside of average volatility.

i.imgur.com/GuQUuIi.png

The volatility index has had a few attempts to spike up since March 23, but the primary Trend is Down for $VIX i.imgur.com/LJ185B7.png





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[sd]

BA MOMENTUM STILL AT WORK
i.imgur.com/K6dyhv5.png

PM edit- will be selling the 5 share position at the open Tuesday, leaving the stop with 10 shares trailing @ $200.00 Hoping for a gap high open-

[sd]

We had our 1st Confirmed Covid 19 worker on the job site- a mason that travels with 2 other masons sought medical attention this past Saturday with very high blood pressure and was diagnosed to be Covid positive. The other 2 employees left the jobsite mid day when the results became known. We immediately checked every individual 's temperature, and all were clear-
The procedure going forward is to be a daily temperature check of all persons, masks, and waiting on the tests of those that traveled with the infected person. Note that this is a construction site with outdoor conditions, but proximity on scaffolding etc. It will be interesting to see how this develops.....
Listening to Scott Gotlieb on CNBC - expects that this virus will expand this fall, higher infections, and an expansion of the virus- that will be socially tolerated and the solution will nOT BE TO SHUT DOWN BUSINESS. America will learn to live and die with this virus this fall, because we cannot simply shutdown our society and stop the economic engine that keeps us all afloat-

As i review the momentum of the BA position, this move has occurred along with a high surge in JETS , cruise ships and assumed to be dead industries.... BA obviously has commercial and perhaps defense connections, and some Space X - investments- It's had a tremendous surge from it's lows- and I am assuming it may see another day higher with this momentum- upon which I am selling 1/3 of the position at the open, and keeping a stop-loss for the remaining 10 shares @ $200.00
The present gain is just over $1,000 on the 15 shares - and selling into the market open hopes for a gap move higher- selling the 5 shares at a new high- and keeping 10 at a wider stop .
By far this trade has provided excess momentum - and so draws me towards the similar types of pullback trades that are likely to underperform.

[sd]

BA hit both stops for an average sell price= 5@ $222.04, 10 @ 220.00 so a very nice gain from an average of $161 + change. or about 37%
Net gain $892 in the past week. Not too shabby for the initial investment. With today's pullback, price closes 216.74 this pullback taking out the aggressive stops locks in the gains, and sees price closing lower, and a close slightly lower than yesterday- While this may just be a pause of the recent up trend, today's stops executed and price has made a lower close-
All is still well above the fast 5 ema, but due to the momentum large move over a few days, profit taking is the order of the day
i.imgur.com/13VgUHA.png


6-10- follow up : Price continues to pullback- Dow and S&P down midday, Tech holding gains
i.imgur.com/gH9kztN.png
Note- Closed @ $203.49 just at the 5 ema - so that early exit on a higher stop trailing momentum captured +$17 above today's close -
6-11 BA selling off with the market - Very lucky to have exited on the tight stop
i.imgur.com/tnsohH9.png

[sd]

2nd day that Tech managed to close higher, but the Dow and S&P closed lower- Tech -QQQ's- gapped higher- for a new high- The Nasdaq closing above 10,000.00
overall, a nice 2%+ gain in account value in the past week+ - with Tech exposure delivering the majority of that gain.
Took a few moments tonight to adjust stops higher across the accounts- Holding a decent gain on positions taken the prior week-

[sd]

Painful day- Dow losing -1700 pts- almost 7% - indexes down -5, -6%
Even though I had raised trailing stops yesterday, I hadn't made the stops extremely tight- thus, took more of a loss than I would care to- Also, I did not get to get online until lunch- and sold a few positions that had not yet hit the stop- All in All- sold 15 Vanguard positions- keeping only 2 bond funds- one was up slightly. Had I been able to see how the market opened, I likely would have tightened the stops or reduced some of the positions. Went from a new account high down -4.5K but I'm still up slightly from 10 days ago.
Complacency is the watchword that applied here- I recognized that we were highly over valued, and that the market was pricing in a big recovery on unrealistic expectations- I saw that the Futures were looking sharply lower... In hindsight (20-20) I potentially could have taken a few minutes to check how the market was opening, and possibly would have tightened the stops further. As it is, I'm slightly up for the recent past 10 days, now holding only a few bond funds, and 1 or 2 shares of each of my prior holdings for tracking purposes.
Similarly in the IB account, now stopped out of all positions except a few shares of GLD-
At this point, the one day sell-off prompted by the realization that the Covid may still be here and expanding, that the Fed sees a difficult time ahead- Cold water there- and the rapid V recovery of the market pushing stock prices well beyond their comparative PE valuations - This sell-off is well deserved- I expected it sooner- and did not understand how everyone could be so optimistic. The reality that we likely face means we will have many months of a new reality of jobs that don't come back,,,, Financial crisis as the government aid is withheld and perpetual stimulus checks not forthcoming. Will we continue to recover? Absolutely YES! But what is a proper valuation for future earnings? It seems that this V recovery may have reached a momentum top, and the pendulum swing may be reversing to the harsher reality.

Let's keep this in perspective - I'm using retirement account assets under my active management-
A fellow co-worker- AGE 45, with No retirement assets presently- just finishing his final custody payments for his 18 year old daughter- is starting afresh-
Where will he be in 20 years if he starts investing Now?

[ira85]

Just when I thought I was making progress to correct a mistake I've made for years, the market smacked me up the side of my head today and breathed new life into my bad habit. The bad habit has been making investment decisions based on my personal opinion of the state of the market. Since the end of the Great Recession in 2009 I was too bearish and very heavily in cash. Once I came to grips with the reality I'd missed the bottom, I decided to stay in cash and wait till the next bear market low to go “risk on.” Ten years later and still in cash I reached the conclusion I needed a plan B cause the bull market was more than 10 years old and still running.

So I decided to learn something about technical analysis and chart reading. I thought I was making some progress, but then I realized my old habit was at work again. When the markets tanked this year in March I believed it would be a long, severe bear market. I tried to short the market but a bear market rebound in April kept me on the losing side. About June 1 I realized I was doing my old, failed investment decision making. Instead of letting the charts tell me which way to go, I was trusting my gut. I decided to listen to the charts. Buy a couple of ETF's and go long. That would have been the right decision in April and May. In fact it was the right decision on June 1 up until today, June 11. The market took a wicked turn down this morning and just kept going down. So making the right decision and going long got me clobbered today, right? No, I got lucky. Another bad habit, procrastination, saved me. I was going to buy a couple of ETF's, but I hadn't gotten around to it yet. So I was still in cash today. No loss today in the big sell off but accomplished by mistake. I should have listened to what the charts were telling me, that breadth was strong and the trend was up,

The market was going up until the last few days, when it began to show a little weakness and could be vulnerable to profit taking. Now what? I won't buy on the long side while there is high volume selling. If this is a 2 day correction with a resumption of the rising trend, then I'll buy those ETF's. If the selling continues and it looks like a resumption of the March bear, I'll consider a short, not because of my long term temperament, but the current market action. There has been debate about whether the March bear market ended and a new bull market began with the April-May action. I will wait and see in the next few days and make decisions by market action not my chronic pessimism. Personally my concern is the virus may come back for round two. I think the risks posed by the virus was the proximate cause for the March crash. If we find ourselves dealing with round 2 of the virus it could be more disruptive than the first round.

Interestingly, SD shares some of these concerns about the potential dangers with this virus, but he managed to stay invested and did so quite profitably. I also realized SD is much more active in managing his portfolio than I am. If I try to copy his approach, I'll have to get on the computer and manage stops and buy-sell decisions a lot more often than I ever have. Perhaps belatedly I have to consider do I want to be that involved. Or do I try to implement a different approach that is effective but less labor intensive? I'm thinking only 2 to 5 ETF's and no single company stocks. With broad market baskets and no company specific risks, a less intensive approach may work. I believe Vanguard makes some portfolios with just 3 ETF's. -ira

[sd]

Hey IRA,
Well, holding only cash for a long duration- doesn't keep up with inflation- Socking some of that away in staggered duration CDs would actually be Safe and offset some of the damage inflation can be doing to your purchasing power.
If you get the opportunity, check out the most down to earth practical financial adviser -Heritage Wealth Planning -many videos on you tube-
I find this guy refreshing and uncomplicated- www.youtube.com/watch?v=e3E2Uv-N7CA&t=957s
Lots of different videos- most designed to simplify the portfolio process. You may get some ideas from him worth applying.

As opposed to managing All of your assets yourself- a Vanguard adviser only charges a modest .30 for a 50k account - and would position you according to your Age/health/Risk Tolerance-
The Vanguard adviser I spoke to was suggesting a 4 fund strategy- VTI, VXUS, BNDX,BND Which would give you very broad exposure to a wide range of stocks- or one could consider their target date funds as well. Conservative investing vs swinging for the fence. It makes sense to not have to jump in and out of the market and tweaking stops- There's much better ways to spend your free time rather than thinking you may have to keep focused on the daily moves of the markets- You could also start with a small 10% entry position size and buy the core stock positions of your design portfolio , and then gradually add in each month, or each quarter, essentially dollar cost averaging in over the next year . You would also be getting the benefit of the dividends issued over time.
I get missing out on this big 10+ year bull rally- now deeply in over extended territory, and over priced- With my flight to primarily cash this week, and today's attempt to rally back, I'm not too anxious to jump back in - BNDX was the gainer during yesterday's sell-off-
But I like a Plan B approach- For myself, My thinking is that the markets were overpriced and not realistic about the economic recovery- So, I will wait for a pullback to sort itself out-
In the Interim - Not sweating about it - Going to hang up the "GONE FISHING" sign and enjoy the weekend!