The market continues to trade in a narrow range very close to the all time highs. Today’s action was similar to yesterday’s in that the S&P 500 once again attempted to hit new highs only to see profit taking into the close. The range of trading was also wider than yesterday and, for the first time this month, the S&P briefly went below yesterday’s lows.
In the grand scheme of things these are fairly useless observations and simply signs of a market in a sideways consolidation. The market is basically in a holding pattern, waiting for clarity from the Fed regarding the QE program before making the next big move, which should come as soon as tomorrow.
However, should the S&P close below 1660-1662 range then we can talk about a possible composure change and the need to be on the lookout for a bigger retracement. Until this happens there is no need worrying about it.
For us, this was almost a repeat of yesterday. Of the twelve trades we did, only one (FXEN) reached all the measured targets and all other winners were salvaged through our aggressive trade and risk management. Aside from FXEN, notable winners were EGLE, ANR, NUGT, and JRCC – 2nd trade, while the losers were JRCC – 1st trade, DDD, TNA, PCLN, and GOOG short.
The last two large-priced “point” trades in PCLN and GOOG, resulted in a roughly -1.50 point loss, so we have one of those days when percent return for the day is positive, but point return negative. (As you know from our previous posts on this theme, trades in high priced stocks are negligible from a percent/portfolio standpoint, but have a disproportionate impact on points.)
- Gross % Return: +1.56%
- Net % Return: +1.38%
- Total points: -0.90
- Number of trades: 12
- Green trades: 7
- Biggest point winner: +0.41 (NUGT)
- Biggest point loser: -0.79 (GOOG short)
- Biggest % winner: +6.60% (FXEN)
- Biggest % loser: -1.45% (JRCC – 1st trade)
For more details on today’s trades, please see the attached log.