/ES made all time high of 3158 on December 2 (Monday). Well today is Friday and since then we've seen a 89 point drop and a 82 point correction to end the week almost unchanged. Vol was bigger than usual yet the market didn't move much net net. How does one trade such a move? How did you?
Umm, these types of weeks are milk and honey for traders who know how to get into and out of a market like a mechanic. In terms of swing trading - I’ve heard from clients who just crushed it. Like double digit returns on equity in a single week. We’re set up for swings and we got a month’s worth in a week.
If I was more skilled at trading I would have made a fortune from the wild swings. Since I suck I just ended week with a bit more than when entering.
If I was able to swing this shit, I would have crushed it. Alas, the trade war has taught me that my swing style is no good. The next 10-20% drop I could suffer though may never get resolved. And it can turn into a 30-40% drop. ONE MAN.
Whether or not I'm skilled, I killed this week. I wanted to short today for next week but my gut was against it.
A word of caution about December: it’s a choppy incoherent meat grinder. The last three weeks in December I really lay off it and advise clients to do the same. Most big funds have closed their calendar years last week in November and the order flows can be random and incoherent. I wish everyone good fortune!
Seriously, honestly - in terms of being a successful independent speculator the worst affliction you can have is a macroeconomic opinion. Anytime you gamble your Id, your ego, your cognitive persona against the market you are setting yourself up for abuse.
I KNOW where the market wants to go, but May and August proved to me that I can no longer take a chance on my beliefs, because ONE MAN can change all of that. And well, TWO men, because next Wednesday we get the Fed rate decision, and Powell's mouth. After that, the 15th tariff decision. I can no longer swing though 10% drops, because one of them is going to keep on going down, down, down, with all the uncertainty in the air. If that uncertainty becomes a reality and Trump flips his lid, I would not survive the aftermath.
Great week, played half size positions with my eye on a pending reversal, ended up with double the gains. Coasted into weekend with small over the weekend holdings. No special skill, just happened to be at the right "place" at the right time.
Most of my clients are like you - and like the Marine Corps boot camp, I have to break you down before I build you back up.