Major changes took place today to the markets in which I have held positons.
Let’s take them one by one.
USDCAD met its target — actually exceeded its target. I am out. EURUSD entered the top end of the target range. I have reduced my position by 40%. The U.S. Dollar Index met its target. I am out.
Stocks today could have put in a short-term bottom, even an intermediate-term bottom. I covered two-thirds of my short position.
The stock market was easy up until yesterday. The H&S top was a lay up. It was predictable that the two-month trading range starting on August 9 would be resolved to the downside.
The time to be bold is when the markets are clear. The markets were clear to me. It was time to be bold — in trading and in the narrative of this blog.
I am no longer bold. The old adage prevails — when in doubt, get out. I feel no obligation to always have an opinion or a position. I have made this fact clear. Classical charting principles do not always measure a market.
Am I still a long-term bear on stocks? Absolutely. But what does that have to do with carrying a position. An opinion does not demand a position. I do not want to have money at risk.
I have a small position in stocks (still short from way up there), in short Soybean Oil and in the EURUSD. Otherwise I am in cash.
The time to be over-extended and leveraged is NOT when things are cloudy. To me, things are cloudy. I am in no hurry for the clouds to depart. It may be several months before I have a trading opinion in stocks. I am tempted to short stocks against Friday’s highs, and that still might be the thing to do. I will go take a walk until that feeling leaves me.
I know some traders who went short big time on yesterday’s breakdown. When traders get position to make up for what they should have made earlier, then it is time to be very cautious.
There is a time to be bold and a time to be old. But for me, this is not the time to be bold and old. So, I will settle on just being old.
$SPY, $QQQ, $DX_F, $EURUSD, $USDCAD