No, the commercials were net long around the time that this rally started. Look at the SPOOS, not the smaller e-mini. The e-minis are just a smaller, more agile vehicle for speculation and hedging. The big boys play in the big contracts.
146% gain on invested capital in the past 90 days on 52 trades. P.S. I don't daytrade. Straight stocks long, overnight holds, no margin. Yes, it can be done. With a little luck. And a raging rally doesn't hurt either.
I can see the mkt going up but can't identify any longs to buy. I then trick myself into thinking i see a weak sector or 2 and load up on shorts. But then the weakness fades as the spy keeps rising. I did the opposite in Feb during the selloffs. I have a hard time spotting any breakaway relative strength on my nyse names, and any relative weakness turns out to be a trap on the up days. I often feel like i'm the only one trying to day trade these stocks. Changes in relative strength (which occurs in the form of a slow drift) seems to often be random. How is it possible that i could make money every month last year but now lose my a** every day. Has my view of the mkt mutated or has day trading NYSE changed thta much?? I see smaller relative strength changes relative to futures than ever before. No one seems to trade off of the relative strengths like they used to. Trying to come up with a better way to know when to apply my system. I used to apply it to all stocks all the time. But now there is so little daytrading interest (relative strength in play) that this is a losing proposition. It seems that my strategy works in reverse on stocks which are not in play (to some extent). Because i take a random period of underperformance to mean something. When really it is nothing and should be faded instead of acted upon. Anyone have same experience?
My reference wasn't related to the commercials or the futures, but to hedge funds. If JJC isn't spouting crap, many of these people haven't had a great two months and their returns for this year are trailing the S&P 500. I saw a post here in the last couple of days where Todd Harrisson hasn't exactly been having a hot hand since the SPX was at 810. They sucked me in at 940, but fortunately I'm a savvy option trader and didn't lose more than a couple of hundred bucks. I've used Realmoney.com(ET as well) as a contrarian indicator before with success and should have recognised it again. How often has JJC been the only one right on that site?
That's why it's so hard to beat the market. The dumb money who just "buy and hold" probably beat hands down all the "pros" the last few months by just holding onto positions. Whereas the smart money trying to jump in and out timing the market might do well then when a change or dramatic thing like this happen they doubt it or question it or just sit back. And before we know we have a 25% rally from the bottom of March. Doh! I did OK. But would have been better if I just held onto all the eminis from March and not try to be fancy and go in and out. haha. The market fools everone. That's why it's so difficult to have a great long term track record. But in this short time horizon, I'm just trying to bang out profits every day, every week. And I did that so I guess I met my objectives. But if I had just step back and saw the big picture, I would have been up mucho! haha, oh well. you can't win them all!
I think the market has definately changed, the obvious point being that we are currently in a bull market, and shorting anything is just not going to work, I know, I have been so used to fading up moves because of the last year, that I have been getting chewed up doing it the last month. I too feel like I am losing almost everyday, luckily I have cut down my size dramatically till I can figure stuff out. I am curious about your ideas of relative strength, what do you mean "I see smaller changes in relative strenght to the futures than ever before"? Do you mean everything is following the futures more closely now? I have been noticing that there are some decent plays of spreading stocks intraday, Like going short a weak stock and long a strong one, in the same sector. When you play different sectors it seems more random, but I haven't had the cajones to try it yet. THe market now has follow through, which in and of itself is very different from the market of the last 6 months.
Silk, As far as daytrading goes, I can give one recommendation. Cut down your daytrading size. Then when there is a lay-up and it bangs you over the head. Take that trade with size. Other than that, trade small. Last year, my average scalp position was 2000-5000 shares. Now my average scalping position is 1000-3000 shares. My volume is alot less. I am a lot more selective in picking my scalps too. But, I have a higher percentage of them working out. Granted the profits are a lot smaller. But, they are there. Play smaller and it will open your eyes. You must accept the fact that the "big" money days are not here right now. Use you skills to be more selective and only take the trades that hit you over the head. You must do that because you truly believe that is the way, not because someone told you. You must truly accept that and be happy with that. Concentrate on breaking even right now. Trade small with no pressure. Then you will slowly, but all of a sudden find yourself in the groove again. It will be a smaller grove, but it's still a grove. Think positive, don't beat yourself up. You're a good trader! I wish you the best! gotta_trade
I think the guys a Schonfeld practiced trading the relative strength game and did well with if for a few years too. That was what they had been teaching all their new traders for years. However they are having troubles with it too and recently shut 4 offices down. Also in bull market type of movement resistance usually gets taken out and support holds. People have been shorting resistance all the way up with this move and getting worked. So maybe focus more on long opps then short opps. Someone else mentioned cutting size down until consistent again which is probably a wise idea. Yea it sucks to miss a good day trading smaller size, but getting consistent again helps the confidence and once that is back you can easily scale up. It is hard to trade with out confidence and conviction in what you are doing, which is tough to get when going thru a period of inconsistency. I have been kicked in the balls before too (hell where do you think the name "cornholetrading" came from) and cut back so that while I am losing I can work thru it trading smaller size. When I get back in the groove it is lot easier to scale back up and make up for lost ground when I was churning away in my slump.