Think Right, Trade Right

  • Staying short the SPX500
  • Trying to pick the right spots
  • importance of peace of mind
  • Canadian Dollar looks stretched 

BACK IN PLAY - Hope everyone had a nice weekend and got off to a good start this week. Was on the road Monday and good to be settled back. However, even though I wasn't able to put out any updates, I did re-establish my SPX500 short position from the previous week. I continue to see risks tilted to the downside here, with limited upside. I have done very well selling this market over the past few years despite the market's intense uptrend to record highs.

PICKING SPOTS - I hadn't dipped back into a short position since December of 2015 and last week was the first time in all those months despite an impressive surge and what may have appeared to be many good opportunities to sell along the way. So I think I am doing a good job picking spots. I only take positions when I am in love with them and while I may have liked the idea of selling in recent months, it wasn't until last week that I finally 'loved' the idea of dipping back in. 

CLEAR HEAD - Why did I exit into the weekly close? It really had very little to do with the trade and more to do with just wanting to lighten up exposure into the weekend. Some weeks I will hold positions over the weekend, but quite often, I like to step aside and then dip back into the new week. It really comes down to just wanting to sometimes have a clear head with the family over the weekend and not be thinking about open exposure. 

PEACE OF MIND - Many of you email asking about my strategy or why I will do certain things, and I am more than happy to let you know why I have done something. Most of the time, the reason is just something as simple as peace of mind, which is by no means something that should be downplayed. I think peace of mind is probably the most important thing when trading. Making a decision because it puts you at ease is more important than anything else. If you aren't thinking right, you won't trade right. 

THE LOONIE - As far as other strategy goes, I'm not seeing anything else out there right now. Currencies are chopping around and it looks like the US Dollar might want to try and make another big comeback. I like the idea of buying the US Dollar and at the moment, a long USDCAD position could be the most compelling. But again, nothing is screaming out to trade right now and so the right course is to sit back and wait it out. In the interim, I am looking for stocks to accelerate to the downside. 

If you aren't thinking right, you won't trade right. Via @joelkruger

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