timwest

If you were up 10% so far this year, what would you do?

FX:SPX500   S&P 500 index of US listed shares
2313 31 26
Let's assume you were up 10% so far in 2016. (The green box labeled on the chart is a level where there are 10-days that close lower than that, so it is a fair level to call "the bottom" and the market is up 10% from that level.)

If you purchased the overall stock market when the S&P500             was 1880 back in Jan-Feb: What would you do now?

1. Cash out your 10% gain and walk away?
2. Sell "at the money calls" for Dec             31, 2016 and take in an extra 5% return?
3. Cash out the 10% gain and buy back after a 5% correction?
4. Cash out half and let the rest ride?

There are many other choices, but I'm curious to know what you all are thinking.



Comment: So far, #3 is the best option with the 5% correction being about spot-on for the bottom in June on Brexit fears.
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Cash out the 10% gain and short the market !!
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Currently short 2086.00.......knowing 2116.00 or so is real......gives me room to add to position.......2120 is my stop......and we will see from there......bullish...I will find a spot to enter......bearish.....re-enter short @ 2116.00
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I like your cash out of half and let half ride choice. However I will be selling Bear Call Credit spreads at around the 2135 level and see if things begin to slide down. Then if things go down closer to 2040 I would sell some Bull Put Spreads around the 1950 to create some Iron Condors. I am feeling more short, than long, so my quantity of Bear Call spreads would probably be higher than Bull Puts. I am also nervous about a fast slide down which can make for some large losses if everyone panics like some did back in October. Of course because i am currently a Bear waiting to be convinced I should be a Bull I have already had some rough weeks with the spikes up in price, so I am overall cautious and have less than 20% of my investments in the Vertical Spreads. I don't really day trade like many others.
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Crows are shorting, we are buying. SPX will form a monthly 5th. wave. It'll collapse after all when everyone bet in.
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Victor.Y.F PRO Victor.Y.F
Sorry, I mean "Crowd".
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TomPower Victor.Y.F
Vick looks like you were the one who was right. How big is that V however
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sell every thing and stay out of the market.
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timwest PRO dhananjay.d.joshi
I see that DMI(14,14) can be declining while the price keeps marching higher. Note: 2012, 2013, 2014. DMI is simply the net movement outside of the previous bar's range, so if you see a low number it means the market is consolidating and when you see a high number the market is moving directionally. If you join us in our Key Hidden Levels chat room, we often discuss "range expansions" and signals to enter/exit based on these patterns.
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Thanks for reply tim, will surely join the room.
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TomPower timwest
At some point to my will however right now I don't have any time we join you in that chat room
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Tim if I hadn't listened to some other gurus and listened to you instead I wouldn't have shorted oil the last 2 months and found out my calls were in the money and I was leverage way over. The fact is there are some sad stories out there and I'm one of them.
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timwest PRO TomPower
I'm sorry Tom - I don't consider myself a guru, rather, I like to think that we all can figure out the path of the market together using logic instead of emotion. If you feel 'emotional' about anything, I'd suggest writing a journal so you can "see" your emotions on paper. I've advised everyone to "graph" your emotions too so you can use that information to your advantage instead of having it hurt you. I can show you how to graph your emotions. Label a chart each day with a red box around the price action if you are bearish and put in comments to explain why you are bearish. If you are bullish, put a green box around the price action and explain. If you are reading the market correctly, the price will be above your green boxes and below your red boxes. Simple as that. Over time, you can see if you are reading the market correctly.
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nsdqx timwest
Great piece of advise
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great point about emotions.
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Either sell calls at the money for 5% or close half and let the rest ride...add more if it drops 5%. (with a reasonably wide stop loss, selling covered calls as my 'stop')
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Sell everything and wait.
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I choose door number 3 -> Cash out the 10% gain and buy back after a 5% correction?
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timwest PRO BizkitBR
That was the best idea so far! Well done!
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FYI - I bought the lagging European recovery via EFA and I'm liking it a lot..! ! !
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What about the guys who bought in December?
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timwest PRO parkdanil
And the gals who bought in December. The old "break-even-itis" decision. What do you think?
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parkdanil timwest
Well, I guess it depends on a lot of things. Like time perspective of the investment, the purpose of investing in the first place. I guess there will be quite a few private sellers out there. If I was this person I would maybe move more into stock picking(still within S&P500 though). From my view I don't see many good alternatives to the stock market.
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timwest PRO parkdanil
Have you found any good alternatives yet? Oil is down 20% from the peak and Biotechs are down a lot from the peak. Refining stocks are down big. There is always a group that is oversold and unloved.
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Wait and See. S&P500 is approaching some important resistance levels. Fundamentally, nothing changes until april/may/june fomc meetings (or some unpredictable world event ;) ). The oil prices are also favoring s&p higher.
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Interesting that this hit my inbox so recently... I am now in this exact position and have been thinking about low-risk moderate-gain egress strategies a lot. I have been thinking about parting out the money into thirds:

1) I would cash out 1/3rd of my portfolio, selling majority positions in the riskiest stocks, and move half of the remainder into high dividend low volatility stocks with a stop loss equal to double its dividend yield in loss--basically, if it is low risk I do not want to be stopped out at a low I will automatically have compensated had I stayed in through the year. I would probably buy a basket of stocks with historically increasing dividend yields as a measure of stability.

2) The other half of my remainder would remain in current holdings I like, or go into ETFs because the diversity through ETFs would provide more stability. I would sell etf funds to buy good opportunity stocks when the time is right (ie, mildly mitigated from correction damage due to its condition as oversold, but a growth opportunity without a correction). Set limit sells based on charts with relatively tight stop losses.

3) With the last third that I cashed out, I would probably have it on hand for my pick of unconventional investments:
- A portion to cryptocurrencies, which I have found decent mid-low triple digit percentage gains in
- A portion to trade oil, which would probably keep me more tapped into global utilization in industry. My track record with oil isn't bad either-- I texted my friend that I thought we hit the bottom of oil on Feb. 11th... the actual bottom happened to be the next day (trading WTI).
- Precious metals if the price is right. The only current candidate for me would be platinum, as gold and silver recently experienced large upswings (Fed sentiment makes me feel as though it would be highly dependent on too many external factors and global policy; platinum has an ancillary use in industry so it is buffered a bit more from market mood swings than gold/silver). Historically, platinum is worth more than gold by a fair margin in non-volatile periods, and palladium and copper are too tied to industry to succeed as a low-risk option.
- If I don't find it too difficult, I would also consider learning how to trade the forex markets during this time to get a deeper understanding of global financials to make me a better overall investor.

Now I hear a lot about people using VXX as a direct means of hedging against volatility; however, I have found that the safer and much more lucrative play is to have cash on hand to buy inverse volatility, which acts more logarithmically in recovery than regular stocks and does not suffer from backwardation as the VXX currently is. The nature of how the VIX is structured makes it so that you can make several quick but fairly profitable trades within short amounts of time, allowing you to buy in again if volatility spikes. Within the short span of time from Brexit to today, it has yielded a 50% gain, which I have been selling in segmented limit intervals (the last of it I sold today). On an unrelated note, I also think our current lack of volatility is misplaced (the VIX is pretty low), almost as though we oversold our fear in the market through the scapegoat of Brexit. It doesn't feel right for how dependent we are on global economics and how indirectly dependent the world is on US politics.
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timwest PRO charle5035
Thanks for the lengthy reply @charle5035 I hope you have done well this year overall.
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I appreciate the topic; it helps me write out my ideas in detail to see if it makes sense to me (now it seems too complicated to go right). I'm doing decently this year--I think I'm beating the S&P after the difference in taxes. Although it is my first year investing or trading at all, I've learned a lot, but most importantly I've invested in the most important thing-- my own human capital.

Corny, ain't it?
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I bought some stocka and sold them when tjey qere 10% up. Some wnt past that. Like AMD but still ik waiting for 10% correction again
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Well done @2use. AMD has been so strong. I missed the AMD move.
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Do you guys have any thoughts on its future from here? I got in right before this last earnings report on a hunch and sentiment from the gaming world but am on the fence on what to do with it.
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