I’ve made many errors in my buying and selling life and I’m positive I’ll make many extra. My most up-to-date mistake is one which I assumed I had rectified prior to now. This explicit mistake is, nonetheless, creeping again in. This explicit error could possibly be categorized beneath “throwing good cash after dangerous”.
What I imply is, I’ve been bearish all 12 months lengthy. General, this was the correct angle. Nevertheless, there was a noticeable change on October 13 kicking off this rally. After that, my executions have been terrible and my alternative of targets was poor.
The primary drawback was partly on account of restrictions on how I can commerce. I had type of managed this situation, however it’s nonetheless a problem nonetheless. However the second level about selecting poor targets is my huge mistake I’m referring to. I’ve been so centered on the broad market that I didn’t see higher alternatives passing me by.
After I say higher, I imply not solely extra worthwhile, however safer too. Essentially, this whole selloff this 12 months actually is principally being led by know-how shares. From peak to trough this whole 12 months, I believe the one tech inventory which has completed a bit higher is Apple (NASDAQ:) by a smidge. Whereas I’ve been shorting , I’ve been speaking about tech shares as nicely all 12 months lengthy, so it’s not like I didn’t understand they have been shortable. I simply ignored them whereas watching SPX go sideways since June.
We bottomed on October 13 and rallied onerous off the lows in two weeks. We then took a quick 5 day pullback then rallied once more to immediately’s excessive. Throughout that point, tech was noticeably weaker (I gained’t publish all of them right here, however have a look for yourselves. Earnings season tech obtained hit onerous). Throughout that entire time, I used to be caught specializing in my SPX quick, however watching in envy as tech obtained killed (I did have an present place in Tesla (NASDAQ:), however was not as massive as my SPX commerce).
TSLA jumped just below medium time period resistance ranges. Whereas I let the SPX rally determine itself out, I believe TSLA goes to have a troublesome time leaping again above a few of these ranges. If I’m incorrect then that’s what stops are for. However total, I believe tech buyers are lastly coming to phrases that their development tales are placed on maintain and have been getting out. What offers me probably the most hope is the relative weak spot of this inventory after its most up-to-date breakdown. Since October 13, SPX is up over 14% from the lows whereas TSLA is down 5% from the lows on October 13.
TSLA zoomed out to weekly exhibits this week has been a pleasant breakdown beneath the choppiness of the previous few weeks. We generated an extended wick right here however nonetheless haven’t managed to recapture the breakdown zone beneath 208.
The month-to-month chart additionally doesn’t look bullish in any respect. We simply began this month, however I’d count on that 208 degree I discussed to be defended ought to we commerce again up there (i.e., ought to this get dragged up by the broad market). Closing this month beneath 208 could be the clincher for a continued fall.
So what might I’ve completed higher? Nicely, I had a winner getting in my TSLA quick. And every push increased within the broad market offered a major shorting alternative in TSLA. As a substitute of hoping my SPX would then observe TSLA, I ought to have been exiting my SPX commerce because it wasn’t figuring out as I’d hoped and will have been piling into my TSLA quick. The identical could possibly be mentioned of Meta Platforms (NASDAQ:), Alphabet (NASDAQ:), or Amazon (NASDAQ:). All of them have additionally jumped just below their respective resistance ranges. Regardless, I’ve gotten absolutely quick. My timing is a bit off, however I’ve my spots picked out and am ready for regardless of the market has in retailer.
Whether or not you agree/disagree, that’s definitely your opinion. As with all trades, carry out your personal due diligence, make the commerce that is sensible to your danger tolerance degree and time frames. I’ve a couple of months for this to work out whereas others could also be days/weeks.
