If you have traded this market at all over the last two weeks – you know two things for certain:
1. The price action is unpredictable!
and
2. Volatility is Crazy!
If you survived or took minimal losses during this time, you are doing quite well relative to most everyone else.
There have been mixed feelings for me. Some great trades, some that I wish I could have back, and some that I wish I still had.
I’ve held Bank of America (BAC) and Apple (AAPL) though it all, and it is currently trading in the green. However, on a day like today, where the market is rallying hard, I would probably be more aggressive to the long side, but I am not. I added one new long position this morning, and haven’t added anything else since. That is because we have seen far too many rallies of late get reversed by news events overnight. I want to build up my portfolio, but I need to see this market breakout of consolidation that it has been stuck in for the past two weeks.
For now, I remain 30% Long and 70% cash. Should there be a little more consistency in this market, I’ll increase my long exposure, but I want the market to show me it is capable of that first.
Below are the long setups I am watching this week. There are plenty of impressive setups on the list, with most of them being bounce plays off of key support areas. My main area of focus has been large caps over the past couple of months. All of which is what my portfolio is composed of right now. I simply want the stocks, that will rally because this market needs them to rally, in order for the market itself to rally.
Playing it safe isn’t such a bad idea right now.
Here’s the bullish watch-list:
