Last week I posted that I was in over 80% cash and looking for a pullback.  My stocks were not doing that great and my options were terrible…  That was last week.  Now, this week, before the market opens, things don’t look much better.  Stocks down.  Options down worse.  ETF/ETP down…  The cash isn’t down but cash is a place holder.  It doesn’t go up.  Not looking good here.  So what to do?

The 24/7 Stock Market News outlets are telling me that the Asian and European markets are down and US Futures indicate a lower open.  Glad about my cash position here but not so happy about the other holdings.   My ETF/ETP is VXX so it could benefit from some fear in the market.  That is why I bought in.  Problem is, I bought early (around $20) so I am down in the position for now…

So what to do?  Look at what the market is telling us.  Not what we want it to…

Long term trend to me is a year or years.  It looks to be up with periodic pullbacks.  Medium term trend is months to quarters and it looks to be at the end of an uptrend.  Short term trend is a week or so, maybe days and hours.  Bouncing in a range here.  This “short term” is where the 24/7 business news is reporting “the new new thing”.  News flash every time something changes.  Important if you are a day trader but not so much if you are holding stocks for longer periods than days…  Fun to watch when you have time.

So I can’t predict the future but I have to take a position…

Staying in cash with shopping list in hand.  This may be a week to start to deploy some of that cash.  Buying on pullbacks.  I have my shopping list.  May need to sell my stocks to limit losses.  Bought the BYD and HOV as plays on improving sentiment.  So far no luck there at this point.  May need to limit losses.  VXX is the opposite.  It usually goes up when things look bad.  So if my stocks go up, VXX should go down.  May need to cut losses here, depending on the way things go.  The F Call options that expire in the fall.  They really swing wildly and although I am down big, that can change fast.  I am still holding them as they are small speculative positions. The problem with stock options is that they can expire worthless.  So need to be careful…

That is the way it looks before the bell.  It will all change soon enough.  So we have to be ready.  Now, I have to get to work at my day job.  Moonlighting is fun but work has to be the priority…

Originally Posted on April 23, 2012   (Before System Upgrade)

Here we are again. A new beginning…  The timing is not good.  But then again, it never is. We have to make the best of what we have. We have to trade the market we have. And so we must begin.  Good time or not…

One of the things that I can offer to you on this blog, is some insight into the way the world works. The world, as I see it and as a result, the trades that I make. I can show you the successes and failures of my choices. Since this is what I have to offer, I would like to tell you where I am now at the start.

Earlier this year I had a few positions in my trading account. As the market went up, I made money. I set stop prices along the way. When the market came down I sold my positions and I took profits. That’s the good news. The bad news is that a significant portion of my portfolio was in cash as the market went up!  So I missed a lot of opportunity…

This means that I find myself with a portfolio of mostly cash and an uncertain market.  I have over 80% cash today.  In my efforts to reinvest this cash over the past month or two I have taken some small positions in BYD, HOV, VXX, and I also have Ford call options. These were well thought out investments and they seemed like a good idea at the time, as they always do when we buy. Today they don’t look so smart. My best position is BYD. I am down less than 1% in that position. My worst position is my Ford Call Options. I am down over 40% there. I am not proud of where I am but it is where I am.  So now you know…

The good news is that as the market pulls back, I have cash to buy the stocks that go on sale.  The bad news, you never know how low they will go before they turn…

So that is where I am today.  I am here to show you my trades.  My success and my failures alike.  This way you can learn from my mistakes so that you don’t have to make them yourself.

Remember, I don’t make stock recommendations or give investment advice.  I am not a stock market professional.  I am an Engineer, Businessman, Educator and Firefighter who has a sideline on the internet.  I show you how I trade, so that you can learn from my mistakes and have some fun watching.  So don’t try this without qualified professional help, based on your personal situation and your homework.  Even then, it is dangerous!

So now what?  Do I cut my losses? Do I increase my bets? Or do I simply stay in cash? Those are the questions I’ll be pondering here and you can follow along as I make decisions and take positions.

Please enjoy watching the market with me and enjoy the occasional success when I make some money. More importantly, learn the lessons with me, when I lose money. For the lessons of loss, will be the most valuable thing that we can take away from this blog.

Please join me when you can, as I take positions and take my trading to the next level, from something I do privately at home. To something I do publicly as my second job, moonlighting in the market…

Date of original post April 16, 2012. (Before System Upgrade)