Diary of a Financier

I Am Swing Trader: Not Waiting for Event Horizon

In Idiosyncrasy, Trading Desk on Wed 23 May 2012 at 11:59

Investors are always sitting in their hands, waiting for something definitive to happen, but uncertainty & event risk are everpresent. Once something happens–that bit of realized certainty investors waited for–it’s too late to act. Once something happens investors don’t want to chase, they don’t want to lag behind, so they’re stuck waiting for the next event horizon.

–Romeo Fayette, 05/23/2012

~~~~

That’s why I make 65% of my money only 5% of the time. I am swing trader. Despite the technicals, despite the fundamentals, I have the composure to buy when there’s nobody buying and nobody left to sell, because:

I’ve grown so familiar with these problems that I can clearly see how to fix them. After all, the fix is the risk to my portfolio [as it’s positioned pro-cyclically].

SPX now <1300 again intraday. Buying a small position in Utilities (XLU), according to my plan. Consumer Staples (XLP), Technology (XLK), then potentially MLPs (AMLP) and Pharmaceuticals (XPH) to follow as we reach 1254 final support. It will be a bumpy ride from here on. Commercial traders will be full-tilt short one day, then scramble to cover the next. Hold on…

–Romeo

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  1. […] allocation to pebbles when I sold the last of my Beta in early May. I bought index exposure to the Utilities ETF (XLU), then some Consumer Staples (XLP), and finally the Euro ETF (FXE) most recently. Overall, […]

  2. […] allocation to pebbles when I sold the last of my Beta in early May. I bought index exposure to the Utilities ETF (XLU), then some Consumer Staples (XLP), and finally the Euro ETF (FXE) most recently. Overall, […]

  3. […] herein.  In addition to adding to some preexisting singlename equity holdings, I closed my longs in Utilities (XLU) & Consumer Staples (XLP).  I took my Russell 3000 All Market ETF (VTI) […]

  4. […] the ECB press conference on Thursday morning, the SPX was acting as if exhausted by these European event horizons. Having willingly suspended their disbelief so many times over the past 5 years, investors seemed […]

  5. […] but also during low-growth economic environments like the last 5 years.  This is likely the last opportunity I’ll have to employ XLU as a bastion of safety before its multiples expand to market […]

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