Monday, June 20, 2016

Be Defensive

Traditionally hedge fund managers and senior traders take time off in May and leave it for the junior traders to hold the fort. I had closed out most of my positions in mid April and headed out on transatlantic cruise to Europe for three weeks. Looking over the $SPY charts this weekend I noticed that we are exactly where we were in mid April. I made a note in my trading journal so I would be reminded of it next year. Being in CASH is a position too and as a retail trader I know most of us are inclined to fall into thinking that one has to have all their money working for them all the time in the market. One has to remind oneself that any money invested in the market be it currencies, precious metals, bonds, stocks or options on stocks are all exposed to market risk. It is best to mitigate risk and execute only low risk trades. I try to get into trades where the probabilities are on my side and plan my trades to harvest profits and mitigate losses.

Market Outlook

Currently there are a lot of uncertainties in the market. We had a pathetic labour report last month with measly 38,000 jobs created when we should have at least 150,000 to 200,00 job creation every month. Most US banks have announced they will be slashing jobs. There are uncertainties of Brexit (UK exiting the European Union) and we wouldn't know anything for sure until Thursday market close. Most banks have already indicated that they would exit UK and head off to mainland Europe if that happens. UK is the 5th largest economy of the World and their exit will depress the entire Europe's economy. It is bound to have ripple effects in depressing the emerging market economies as well as developed economies. Free trade in the last 20 years has made everyone in the world wealthier and Brexit would be a protectionism of UK's economy.

Stocks on My Watchlist

  1. $X
  2. $STLD
  3. $CLR
  4. $FANG
  5. $BCR
  6. $OKE
  7. $BGS
  8. $DG
I am also looking for a hegde with Gold mining stocks that I mentioned in my blog on June 6th There was selling volume in those stocks twice its normal daily volume on Friday June 17th and yet they maintained their trading above 20 dma. That is indicative of institutions buying up those shares and a sign of strength. They all have RS ratings above 96.  Stocks that I currently monitor are only the ones that have the highest possible RS ratings (above 92) They are the ones that institutions are buying.


Happy Trading

Amin








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