Boring, But Unusual Day in the Market
Mon, Aug 30, 4:56 PM ET, by Betty L. - Freshman Equities Trader, Hedge Fund Live
Although today proved to be yet another slow summer day (I can only imagine what Friday will be like as it is the day before Labor Day weekend), the trading session was interesting in that the market slowly bled lower for the entire day. Why is that interesting? We have not seen this type of consistent action in the market intra day in a long time. Today the market picked a direction and stuck with it. Usually we see larger fake outs in the market and much more irrational moves. I had gotten long in two names today–COST and TWC–where I lost money in one and was flat on the other. I made these trades based off relative strength. However, the market’s continual grind did not help my longs. I was about to call it a day, blaming my inability to read the market today. But I decided to make one more trade, and this time, I had to take a short position. Clearly, going long was not working for me so I wanted to see whether I would see green PnL from the short side. I did (on KSS), although I only ended up small in the name. I acknowledge that flipping sides when one is not working for you is an important skill to have. At the same time, however, it seems that lately this strategy has not proven to be as useful as it could have been, namely because of the whipsaw patterns in the market as of late. In a choppy market, both long and short can work equally well on an intra day basis. But again, today was an unusual day for the summer in that the market stuck to one direction. So on days like today, I’ll be sure to see whether my longs or shorts are working and stick to that side of the trade. Visit HedgeFundLIVE.com.
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