100% Cash.. and it feels good

Boldly going where few traders have gone before – the Land of Cash! 

It’s a beautiful place to visit – a place where anxiety is low and life feels safe and secure.  A place where I can read a book, catch up on the news, play fetch with Fido and leave all my worries – if not for just a little bit. Aaaaahhh.. feels nice.

How often do you take a relaxing, quiet road trip to the Land of Cash?  Have you ever? 

It all started back on the 23rd with my blog, “Laser Focus”, written after a two day sell-off-a-thon.  At the time, I stated that I have no idea which way the market will go, but sticking to the setups is all you can do until that crystal ball you ordered from EBay finally starts working. If you dig through that blog, you’ll also see that I was NOT going to trade Monday until I had a feel for the market direction and I was going to protect my cash.

Notice what happened Monday morning – quick popup to 10253.  However, notice that it quickly pulled back and never tested that point again. aka bearish.  I’m nervous.. market is nervous… and the buy volume ended up significantly lower than Friday sell volume. 

At this point, I’m still 100% cash, but let’s say I wasn’t.  Let’s say I bought into a scalp or swing Monday afternoon as the market attempted to improve.  NO MATTER WHAT STOCK I WAS IN (for technical short term trading) IT WOULD HAVE BEEN WISE TO SELL WHEN THE OVERALL MARKET FAILED TO OVERTAKE MORNING HIGHS AND QUICKLY STARTED TO RETREAT. This is very bearish.  Who cares if I would have taken a small loss on a failed scalp or swing?  Imagine where I would be sitting now?

The rest of the week, I was too busy with my day job to play, so I can’t say for sure what I would have done.  However, a quick look at the daily on Tuesday shows that no matter what I bought in the morning would definitely have been sold in the afternoon.  Do you see why?  Step back and look at the big picture.  Thursday and Friday from the week before were horrible.  Monday failed to breakout, but finished ok (BUT, ON LOWER BUY VOLUME).  So, come Tuesday, we still don’t have confirmation of a reversal up. 

Tuesday – big nasty fail again. I’m still on the beach in the Land of Cash.  Are you?  Did you sell when your technical setup failed?  Are you now wishing and hoping instead of planning and researching?

Wednesday – Good day for scalps in the afternoon as the market popped.  However, to minimize risk, I probably would not have held overnight for a simple reason – Wednesday’s action did not move through Tuesday’s highs.  There just isn’t enough security that we’ve found support or that the market has reversed to the positive side.  So, had I played that day, I probably would have exited before the close and sat at home that night counting cash and not watching the futures market.

Thursday – (again, just scenarios so you have something more to think about when you’re trading).
So on Thursday, poop again.  Nothing much to say here.  maybe some scalps here and there. 

Finally, Friday – Nice little move in the morning, BUT the highs were lower than any other day in the week. Now why in the world would I want to buy a stock after that failed move and hold over the weekend?  I would be very stressed out right now.  Just to play out the scenario – what if I did buy on Friday morning’s move?  Easy – sell on any weakness.  With that, it doesn’t look like I would have made it to lunch holding one share of stock.

Overall, the week was nasty and my trading style might have made me a few bucks here and there, but more importantly, I wouldn’t have lost a lot either.

So, here I sit – In the Land of Cash.  I think I’ll go watch a movie.



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