It was another spectacular week in the stock market with Dow Jones Industrials breaching 15,000 for the first time. Taking a look at the daily chart of SPY, we had new, all-time highs on 5 of the 6 previous trading days. And it all started with a gap to the upside after better-than-expected jobs numbers last Friday.
To say the markets are extended at this point it putting it mildly with the SPY way above the 8, 20 and 200 day moving averages. Everyone expects a pullback, but we are not getting it. John Carter recently advised that in situations like this, you don't want to fight the action, you just want go with it until it stops. Its the kind of simple mindset that comes so naturally to JC that at the same time would cause the head to pop-off of someone who is trying to view the markets from a complely rational perspective. And since we are managing swing or day trades one at a time, nothing should happen in any one day that causes much financial damage ensuring that will be around to capture the money-making opportunities when they arise.
I was able to point this out to the other traders on the Simpler Options trading room and some other traders got on board and even John Carter put a position on (believe it was 270-280 call debit spread) as the stock reached the 270 area. The stock made it as high as 274 then based for the remainder of the day and closed at 273.57. I went out long the stock in both my cash and retirement accounts and I am going to try and stick with it until $300 which I think is an entirely reasonable target from here. The logic being that if a stock makes it to $270, why not $300 since its the next big round number.
I also took a similar half-size long position in Biogen Idec (BIIB) at about the 211.5 area. This was close to the bottom of a recent consolidation and I expect the stock will get back into the 220 area next week. Some members of the Simpler Options Trading room consider BIIB to be an "Elephant" with much higher price levels expected ahead.
As for development work, I have started to code TradeStation strategies for some of the swing trading setups mentioned in John Carter's excellent book Mastering the Trade. More to come on that when I'm ready to share.
Enjoy your weekend and be sure to do something special for the Mother's in your life since Sunday is Mother's day.
Looking back, so far 2013 has been an incredible year in the markets. There's no way of telling how long it will continue. So for now, we're just going to go with it.
No comments:
Post a Comment