My stops saved me today. I bought earlier and was stopped out. I had been short from 12,200 though, so its still a decent trade.
11,235 is my buy target. I have resting orders there. That is all.
I think we could melt down to 10,848 on an extreme puke from panicked “investors”.
Its always interesting how “investors” turn into panicked traders when they are looking at 10% draw downs.
Earlier today I said CNBC would be looking for razor blades and slip knots for its analysts.
Tomorrow’s unemployment number will be a big bust most likely.
Sit tight. Pick your spots, and for God’s sake, use your stops.
Stops protect you from yourself when your opinion is wrong.
Stops allow you to exit a trade and leave your ego in tact. This is a good correction in the Dow. We needed it. I am just surprised we never got the pure double from 6500.. We missed by 80 pts.
The key indicator was when I got friendly to being long stocks. You should have all run out and bought puts the week I wrote that I was looking for a rally up to get that double.
Thankfully, I have no problem flipping and admitting I was wrong. Disciplined trading in the end trumps just about everything.
The times I have gotten totally crushed in the market, when I had a position on and wouldn’t get out.
Stops prevent the negative aspects of human nature negatively impacting your bottom line.
But that’s just my opinion.
CER