Reminder: Harlan is available to chat with Members, comments are found below each post.
Well folks, here we are on the 4th down day and in the C wave.
So what are we going to do about it? The same thing we’ve done before whenever we get into these type of markets. And that is not to get emotional.
One of the reasons we can handle times like this is because of trade size risk management. If you employ it the way we do? You will never get blown out of the water, sure once in awhile you get a scrape or bruise here and there but that’s really about it and honestly? That’s par for the course in any endeavor.
That is what allowed us in the market sell off back in August to only get to a point where the total value of our portfolio only went under water for the year for about 2 days and about 2000.00. On a 170,000 portfolio? In a full market melt down to only have that type of impact on us?
By using trade size risk management the way we do it allows you to never lose your cool and always stay on an even keel. Don’t get me wrong, I’m not happy about today’s action but I’m also not going to get myself wrapped into a tizzy because of a moment in time subject to the next moment in time and that is all this is- A Moment InTime. I too also understand the markets are two way streets, always have been always will be.
Much like we’ve talked about not buying strength or breakouts the same applies to breakdowns and weakness. We buy weakness and we sell strength.That goes for what we currently are holding. There are better days than a day like today to sell.
Especially AFTER we’ve been selling off for 4 days and every technical indicator under the sun is flashing about as oversold as can be. So what do we do? Why we look at what our issues are doing, we sweat it out in here. I’m not saying we wont walk away from a few issues in the near future but the time to do so is on strength not weakness. We did that in August and we may consider it this go around. One thing is for sure though and that is we will take it a step at a time.
Moving on to the 60-minute index charts.
11-21 As you can see, this C wave has now comprised itself of 5 waves down with us being in a 5th wave down of micro degree. Of course we still need to get thru the close mind you. We’ll see if the cavalry comes to the rescue like they have in the past right into the close.
SHORT SIDE WATCH LIST
NONE
LONG SIDE WATCH LIST
"Only The Best And Forget The Rest "
"We Trade What We SEE, NOT What We Think, Hear Or Fear "
NUS
TIF
CVLT
NUAN
BJRI
RP
FOSL
FEATURED BUT NOT TRADE TRIGGERED BY US LIST
GLD
OIH
CURRENT POSITIONS
"Let Your Stocks Tell You What To Do By The Action They Exhibit"
NOT YOUR EMOTIONS!
LONG SIDE POSITIONS
11-21 As I look thru our holdings? I really dont have a problem with any of them except BIDU and AMZN going into today I really had no problem with either of them that is until we got the blink your eye gap down. But still knowing the nature of how these two stocks trade on both sides of the market? I’d rather wait for strength to decide what to consider with them.
Aside from them everything for the most part is manageable and intact.
And those are the key words for the day- Manageable and intact.
Below each of our holdings we’ve laid out how much we are down in them on they’re own and then what impact they have to the whole overall portfolio. As you’ll see its why we say Manageable. You will also see why its much easier to control ones state of mind. I can not stress how important trade size risk management is. Just see for yourself below in red.
AMZN (We are long 75 shares of this at 204.56 as of 11-18-11)
11-21 in this issue we are down 8.2% (with half of that being today) on its own. But the total impact to the overall portfolio is 7/10th of 1% all because of trade size risk management.
DECK (We are long 100 shares of this at 102.67 as of 11-17-11)
11-21 In this issue we are down 4.4% (with half of that being today) on its own. But the total impact to the overall portfolio is 2/10th of 1% all because of trade size risk management.
11-17 We did some nibbling on weakness in the face of fear at trend channel support just like we always do. Now? We sweat it out . So what IF (not saying its going to not saying it isn’t as I have no clue and neither does anyone else) this issue went down to the 200 day average as the markets tag the 50 day support level? Well we’d be down about 11 points or around the 10% mark. IF that were to happen should we stop out knowing its a support zone just because we’d be down 10%? or 1/2% of one percent impact to the overall portfolio? Nope.
RAX (We are long 250 shares of this at 42.54 as of 11-15-11)
11-21 In this issue we are down 7.7% (with half of that being today) on its own. But the total impact to the overall portfolio is 4/10th of 1% all because of trade size risk management.
11-20 Recently we’ve touched upon using the 50 day as a guide. A point we want to make with this issue is that it could come down to the 50 day average and you know what? Its uptrend would still be intact.
BIDU (We are long 100 shares of this at 136.25 as of 11-11-11)
11-21 In this issue we are down 12.2% (with half of that being today) on its own. But the total impact to the overall portfolio is 9/10th of 1% all because of trade size risk management.
VHC (We are long 300 shares of this at 21.64 as of 11-11-11)
11-21 In this issue we are down 10.6% (with almost all of that being today) on its own. But the total impact to the overall portfolio is 4/10ths of 1% all because of trade size risk management.
11-21 Caught in the gap down downdraft. Its still above the 50 day and that’s a good thing.
WFM (We are long 150 shares of this at 66.48 as of 11-10-11)
11-21 In this issue we are down 4.5% (with almost all of that being today) on its own. But the total impact to the overall portfolio is 2/10ths of 1% all because of trade size risk management.
BWLD (We are long 125 shares of this at 64.13 as of 11-4-11)
(We are long 75 shares of this at 62.33 as of 11-10-11)
11-21 In this issue we are down 2% (with almost all of that being today) on its own. But the total impact to the overall portfolio is 1/10ths of 1% all because of trade size risk management.
11-21 Manageable and still intact.
AAPL (We are long 25 shares of this at 398.56 as of 11-1-11)
(We are long 25 shares of this at 391.78 as of 11-10-11)
11-21 In this issue we are down 7% (with almost all of that being today) on its own. But the total impact to the overall portfolio is 8/10ths of 1% all because of trade size risk management.
11-21 Our notes from 11-10 still apply to this name.
11-13 Recently we saw a few blurbs about how this issue is totally damaged because its below the 50 day. We get that on the surface HOWEVER look at the overall trend of this stock. It doesn’t trade off the 50 day, it trades off of a big green trend channel.
11-10 So lets play "What If" . What if this issue goes to the green trendline? Well first off its a support level. So would we want to stop out there? Knowing its a support level? And if it were to blow thru there and head to the 200 day average at 262 would we want to stop out there? Knowing its even more major support?
What impact would that have to the total value of our portfolio IF (not saying its going to not saying its not as I don’t know neither does anyone else) it went to the 200 day?. Let’s see we own 50 shares at 395.17 and this issue makes up 11% of our total portfolio. So IF it were to go to 362.00? we’d be down on the position 8.3% on its own. But what about the total impact to our overall portfolio? 9/10ths of one stinking percent!
On top of that? IF we would go there and stop out (which we wouldn’t do because its only a moment in time subject to the next moment in time) it would be a 1658.00 dollar loss. know what? We are up 3300.00+ for the month. So now how much damage would that be to us.
By using trade size risk management it really allows us to never really get flustered or in trouble. This allows us to always stay centered and objective because it really doesn’t mess with our most important asset which is our state of mind. Folks use this conversation as an example for yourself to think things forward and thru. It really helps calm the mind.
MAKO (We are long 100 shares of this at 37.37 as of 11-1-11)
11-21 In this issue we are down 27.7% (with almost 7% of that being in today’s gap today) on its own. But the total impact to the overall portfolio is 5/10ths of 1% all because of trade size risk management.
11-17 We’re really starting to hate this stock. We were ok with the retest of lows yesterday as that’s how double bottoms are made. But it’s a bit iffy here. As my friend said to me once; Want to see a stock take off to the upside? Just sell it and watch it take off without you. We’re tempted to pay the market gods with this one. Seriously though? It’s 100 shares and we’re just going to sit it out for a bit more of in-flight turbulence.
SHORT SIDE
NONE
