Good morning and Happy Sunday,
I have been doing this a long time and last week I took the second largest hit I have ever had trading and investing. I did not blow up my account but it was a significant hit. As long as I have been doing this I still learn valuable lessons from Mr Market. I recognize where I went wrong and I shared my mistakes with the pro members on Friday. I will make it back and more importantly I will have this lesson burned into the memory banks so that I do not make the same mistake in the future. The market can and will teach you lessons no matter how seasoned you may be. Losses are part of the business and you will never be 100 percent correct. As traders we have to accept that as the cost of doing business. However, we have to manage our trades according to the amount of risk we are taking and make sure we size them appropriately. I preach it all the time, but in this instance I took too much size and failed to recognize the amount of risk even though there were plenty of warning signs for me to see. I violated some of my own rules and I paid the price for that. I will make it all back over time but the current market conditions will make it more challenging.
We have a lot of technical damage out there but we could be setting up for quite a snapback and even if it turns out to be just a dead cat bounce it could give us some nice trade opportunities.
As You can see from the charts posted below the sectors and indexes are looking extremely weak. The only charts that looks bullish are SPXS TZA TVIX and UVXY. Those could continue to get some follow through if we do not get a bounce.
The end of the month is upon us and we may sell off into the close of the month and then get a bounce as the new month begins. 3 sectors I want to watch closely are the XHB, XLB and XLF which started their decline before most of the other sectors and could be one of the first to show some strength. The other sector that I think needs to find some support and bounce is the IWM small caps.
One thing is certain.. if we do get a gap up day> DO NOT CHASE ANYTHING ON THAT GAP UP> Be patient and let things come back to you.
Highly anticipated earnings **
**Source WWW.EarningsWhispers.com
Economic Calendar **
**Source www.MarketWatch.com
Last weeks list of stocks to watch from the video and their performance for the week.
Sorry this weeks video is for members only.
