I have started a full time day job again, so there will be no during the day updates anymore. Which makes it a bit different on playing the market. Analysis at the end of the day and execution the next day makes trading a lot more challenging. So the style will need to become a lot more suited for swing trading. Last few days have been brutal to my portfolio. The option portfolio has lost about 30% of its value while I wasn't watching.
There is a lot of selling in the market lately. The big players have been selling on the news. The bull scenario is that its a pullback and with Fed pumping all the liquidity in the market, its inevitable that stocks will continue to go up. (And there is the conventional wisdom of "Don't fight the FED"). This is now reflected in option pricing where put premiums are declining dramatically compared with a month ago.
At the same time, if everyone reaches the same conclusion and enters the market, then there are no buyers left and the market peaks leading to a big pullback. Lot of leading stocks are already showing selling pressure.
So watch out for a big pullback possibility. It may not portend a market top, but it could put a dent in your portfolio.
No comments:
Post a Comment