warm tea

Results for USIC by year. 2020 was one for the record books. Appreciate how hard this game is. Just being profitable is difficult. I have spoken to traders who were profitable and chose not to report but they probably make up a small # of the traders who enter. Even if you bump the numbers up by a few %, on average only ~20% report being profitable for any year.

I've been talking about this range in the general market for weeks now and haven't been doing much in the way of trading as the environment for me has dictated a lot more spectating than speculating. A lot of cross currents continue however in the last week the NYSE has started to join the weakness as breadth has started to roll over and selling volume hit 4:1 there yesterday which is the highest level of the year and now all the major averages are well in red territory for the year as the small caps and NYSE have given way. The good news is that sentiment is starting to get scary with AAII and fear/greed going way negative but those are terrible timing indicators. Put/call also started to spike which used to be a decent indicator of a bottom is closer in the near term but all of this is good from a contrarian standpoint but not a timing one, at least for me. You also have precious metals being taken to the woodshed this morning so looks like the market is starting to 'get to everything'.

Rotation turning to liquidation?? This market has been tricky and heavily rotational for months. I thought yesterday we may sell off hard and we reversed suggesting some of the risks were priced in but it was still a rotational mixed bag. Now that reversal now looks like a bull trap. This is the tricky part of higher vol markets. VIX is pressing 26 as I'm writing this so this is time to play max defense for directional guys like me. I won't comment on geopolitics as no one cares what a trader/risk manager thinks and the market certainly doesn't. We are opening down right at recent support here and to my eye 200-day seems like a layup but we have not seen a real route/liquidation since last years tariff tantrums so it wouldn't surprise me at all if a lot of PMs just decide to cut risk here.

Well I said at the beginning of the year I'd talk more about losers (pounding chest on winners is immature & not particularly helpful imho) and here was a classic case of 'trading near the danger' point that I re-entered again yesterday. (Took small loss on prior trade) If it doesn't get going quickly I'm right back out. Not as tight as prior but still for me if I'm going to bottom fish it is in a very tight/deliberate way as a move even to the mid part of this base produces a 2-3R trade from here. Probably fails but still like the risk v reward and this is where support should show up if its still under accumulation. If this goes inside on really low volume I'll look to double up through todays high tomorrow and move whole stop to today/yesterday.