Hopium

Are you make good business decisions or are you a trader addicted to “Hopium”?  Without a doubt no matter how much profit a position may hold a trader always hopes for more.  That’s a normal human reaction, but it’s not a good business decision.  With the markets moving higher on lower volume and pushing against record highs and resistance levels have to take some profits or is hopium in control of your decisions?

I struggled with an addition to hopium for more years than I care to admit.  I would let winning trades turn into losers always hoping for more.  If your walking down the street and a $100 bill blows in front of you, do you stop and pick it up or do you let go by hoping for more?  Of course, you pick it up, right?  So I ask again are your making business decisions or are you addicted to Hopium, letting winners turn into losers rather than taking a smaller profit.

On the Calendar

The only potential market-moving event on the Wednesday Economic Calendar is the EIA Petroleum Status Report at 10:30 AM Eastern.  There is not a forward forecast of US oil supplies however the current trade has proved to support higher prices.  Other reports which are unlikely to move the market are, Mortgage Application @ 7:00 AM, A Fed Speaker @ 8:45 AM and a 10-YR Auction at 1:00 AM.

On the Earnings Calendar, we have a big day with nearly 400 companies reporting results.  With so many reports it will hard to keep up so make sure you have a well thought out plan of the companies you own.

Action Plan

The Bulls put together another day of rallying toward resistance with slow grinding price action.  However, with a little afternoon selling the indexes left behind candle patterns that suggest some caution is warranted.  Overnight Asian markets we mixed but mostly lower while Europian markets are currently showing modest gains across the board.

With nearly 400 earnings reports this morning anything is possible by market open, but currently, US futures are mixed and indicating a flat to slightly bullish open.  If you’re holding profitable positions, you may be time take some profits or tighten up the stops to protect the gains.  Honestly, I hope the bulls push right on through resistance to new highs, but “hope” is not a wise way to manage the business of trading.  Our job as traders is to make money, and that’s impossible to do unless we work to take profits consistently.

Trade Wisley,

Doug