Well, today didn't turn out exactly as planned, eh? And for anyone out there who claims they saw the whole "Greece pop" coming…..errr, I don't think so. It was about as foreseeable as the silver crash back in early May. Sometimes something wild happens. If you were long and made money, congratulations. But let's recognize an element of chance was at play here.
For myself, a fairly fat profit turned into a small loss. Thank God for stop prices, because I was removed from a number of positions before the big pop. And – just to be clear that my bearishness wasn't all bluster – I want to note that I doubled the quantity of my short positions after the pop. There was one ETF, symbol SMH, that looked like a decent hedge, so I am long a large quantity of that (it is the ETF for semiconductors).
Let's take a quick look at the pop; here's what the Euro did:
Here's how the ES responded (note how it was starting to soften for the day before the news):
And – the most interesting chart for me – here's a daily candlestick of the miners:
Check out that red line I've drawn. That is the battleline, my friends. For the past three days, the GDX has had a huge range, and that line at about $54 has been the shoving delineator.
Of course, this whole Greece obsession has become a bit of a farce. One day there's a deal; the next, there isn't. To my way of thinking, I used the pop as an opportunity to get better prices.
But I have one closing thought, and that is in praise of the slow, plodding way I am forced to trade because of the large quantity of positions I'm in. If I were trading just, say, the SPY, I'd probably get chopped to pieces. Days like today can make mincemeat out of a person.
The way I trade, I am in a large quantity of individual positions, and I cannot flip from bull to bear (or vice versa) on a whim. Instead, the cumbersome nature of my portfolio's makeup – – its unwieldiness – – is actually a blessing. Each stock stands on its own merit, and each stock has its own customized stop. It helps remove some of the emotions and arbitrariness out of my own trading.
Of course, these individual positions are subject to the broad direction of the market. My point is that the nature of my portfolio helps foreclose me from being rash (which, as a human, I am prone to being from time to time). An explosive move like this afternoon's, which was a bolt from the blue, can trigger panic and unwise choices. I am happy that my positions simply have their stops in place and have to live and die on their own merits.
That'll be it from me today. I hope you guys survived – – and some of you, I imagine, had a surprisingly strong finish! – – and I'll be putting up posts from others over the course of the evening.
