It was bound to happen, the market had yet another powerful rally, yet the volume was about 10% less than the average volume. As I said in yesterday’s playbook “generally, when I start to see this many sectors setting up there is a high probability for a bounce, so protect your existing positions”.
The majority of the ETFs I shorted last week and on Monday of this week were either exited with small profits or stopped out with small losses. I still hold a few shorts. All in all, we are up slightly, but it pales in comparison to the amount of unrealized gains we had at the end of yesterday.
For the readers new to swing trading, this is not uncommon and it is a consequence of actively trading. Although, I would much rather be stopped out with small losses than be the market participant holding sitting on large losing trades.
Keep in mind, to make a substantial amount of money each month we need to keep the losses small and let the profitable trades mature. Out of the twenty trading days each month if we can flat fifteen and have five good days we can do quite well.
The US Health Care Sector ETF (symbol, IYH) was triggered as a long entry. It closed in the upper percentile of its trading range and looks like it may have some additional upside tomorrow. Followers of my Swing Trading Playbook should have had about $.27 cents profit in it during the day today.
For a subscription to our FREE swing trading newsletter visit us at http://etfupdater.com/.
Mike Matousek, CMT
Portfolio Manager, ETF Updater
http://etfupdater.com/
