The market ($SPY) has been showing a few signs of a potential correction. Over the past couple of days I have been talking about a few different signs that the market could be in for a little more downside action. Today we saw confirmation of that belief. Currently it is difficult to short the market, we need to give it more time and let a bearish flag truly form before swinging anything short. One thing I have found over the time of my trading is that patient is the best trait to have. More than likely a better signal will come and if you miss a move because you were patient that is all OK because you were taking the controlling risk aspect of trading as the first priority which is a really good thing to get into.
To expand on that topic, I would just like to write a personal note to myself and how I need to improve what I am doing, and how –
I need to lengthen my time-frame. I am a high school student and am in school from 7:15 – 2:15 everyday. While I know how to day trade, I do not think it is a prudent thing do while I am in school. No, I am not talking about because I “should” be studying (I have all A’s) but moreover because I cannot truly grasp the action in the charts from a phone. I need to be able to run through the charts one after another to truly able to take action. Because of this new “rule” I have found, I will only be trading intraday charts from my computer but mostly just stick to being patient on the daily timeframes.
Now that we have that out of the way, we can talk a little more about the markets and some stocks.
As I stated earlier, I think the market is in a tricky point and I think over the course of the next couple weeks IF I had to be positioned and not change at all (gun to head) I would be short. I say this because of the banks, small caps, transports, and many other stocks that are weakening. I do not think you need to be in a hurry to guess the bottom of a correction. You will miss the bottom. There will be a time to buy and there will be an entry to do so, do not worry. Maybe I will be wrong and we go higher and higher over the next couple weeks, if that is the case, I will change my bias and go long. Overall, take your time, be patient, methodical, and consistent.
Apple ($AAPL) not much more to say here, I think that it looks pretty bad and I have been saying that for weeks now, why pick the bottom? Cheap things get cheaper.
Banks ($BAC, $GS) $BAC broke an uptrend line, sold off on high volume and fell out of a wedge pattern today. I do not like that, and currently I think the pattern is a tad more broken than constructive. Same goes for $GS, it needs more time. I do not think it needs to be the thing you focus on buying, let the charts set up again before stepping in.
With all this said, I hope you have a nice night and as always, feel free to contact me with questions/comments via Twitter (@BenCBanks) or the contact Page on here.