It feels like investors are puking this morning. That is a good thing. I am tempted to expand my modest longs.


Anonymous said...

Do you use stop loss on your SPY purchase?

Tsachy Mishal said...

I don't use stop losses. I leg in and out of positions. I am more likely to add when the position is lower.

The S&P 500 is down 60 straight points from Monday morning. If I decide I am wrong I will usually suck up the pain and wait for a bounce to get out.

Tsachy Mishal said...

Please don't confuse this for me saying that I never take a loss. Its just not based on price. Its based on an assessment that something has changed or that I was wrong to start with.

Also, sucking up the pain is something that works for my style because I usually buy things that are already deeply oversold. So if I am in pain it usually means that it is super oversold. For a trend following strategy that might not work.

I have sold positions because I was in too much pain. The vast majority of times I should have just sucked it up and waited for the bounce.

Onlooker said...

Ha! Been there.

A few interesting observations about today.

The dollar is weak for the second straight day with the market down also.

Copper is strong today, and is at Monday's level. A divergence from the market.

Corp bonds, at least as reflected in the ETF LQD, are up to new highs.

TRAN held yesterday's lows, and of course held well above the Feb lows too. Interesting divergence given all the ugly economic data.

I don't know if this will mean anything in the longer term, but they are interesting divergences of a sort at this juncture.

Anonymous said...

Tsachy, I see that you were in and out of SPY this week quickly. So this time in what condition you will sell it again for the trade?

Tsachy Mishal said...

Im conflicted because I think we will see a turn of the month rally and am tempted to hold through next week. But it will be tempting to sell a quick pop because there is still room for a trip lower before that turn of the month rally. It will be an on the fly decision based on if there is still put buying if and when we get a pop.