Tuesday, July 13, 2010

The Shake-Out.

Here is where I got hosed.

Actually, because of my phenomenal patience, I managed to cover my bases. I will sell this small $SPY position at the open for a tidy, albeit modest profit.

I'm testing this new thing, where I buy when the number gets yellow, as it does in the teens. I bought at 13.5. Assuming, as per the earlier yellow numbers, that it would bounce.

It didn't bounce.

I think there was a tell, that this was a shake-out. That this was not a real bottom. The fact that it was in the middle of our trading range should have been a tell. There was another one too, to do with the next day's score. But I was excited to test out something new so I jumped eagerly at any apparent opportunity.

Luckily, I didn't jump in too deep. I was only testing an idea, after all.

And I was sure to test again when the number got back into the teens, which did prove to be a short-term bottom.

Now I've got a few more days of ammo for my indicator. I'm going to try and work it in with some other things in order to produce a reliable buy signal. 3 out of 4 ain't terrible but I think I can do better. I just need to keep accumulating data. When I start a hedge-fund, I'll let you know (LOL).

On that note, I hate the use of LOLs and such. On another note, I obviously have no clue what I'm doing vis-a-vis the stock market, so don't take this shit for real. Do your due diligence, d'uh.

I'm still going to accumulate stocks I like, with solid fundamentals on weakness. I am just using some of my bountiful cash position to play these swings up and down the trading range.

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