As of around 2:45 pm I was down close to 1.7%, a little more than the S&P 500. The good news is that we’re very close to the first key level of technical support I pointed to on my weekend Dow Jones chart a few days ago. I also posted a chart of the S&P 500 ETF (SPY) this afternoon and it shows potential support close by too. The bad news is that I lost my patience just a few weeks too early. I’ve been sitting on the sidelines for so long and when I finally take a step into deeper waters the wave of the correction hits me. Had I not gotten in deeper earlier this month I’m not sure I’d pick today to do it, although I could see this week being another near term low and possibly the right time to add in more.
I’m still not quite 73% invested (based on what I’ll pay if all of my options are assigned at their strikes divided by my account balance), although my use of double the daily price change ETFs is hurting me. I have almost $1,100 left in time value for my options which will cushion further declines a little and will aid in boosting my account if we flatten out. The big hope is that we get a bounce back up, at least half way to the prices of a couple of last week. If that happens I’ll be helped greatly by my $3,250 in intrinsic value left in my options. UWM is my only option that’s still sitting out-of-the-money and I am thrilled I didn’t roll it higher when I considered it at the end of last week.
Since I’m not in jeopardy of going on margin with my current positions I plan to remain as patient as possible during this correction with what I have. I briefly thought about selling some naked calls today on some of my positions, but don’t want to risk losing in a snap back up. The data hitting the wires lately is certainly less bullish, sometimes on the edge of bearish, but I’ve started to move to the side of the camp that believes better times are not so far away again. This dip in the market was overdue and certainly needed if it’s going to move any higher and for now I have to hope it’s only a small correction and not a full on double dip.
(Unrelated – I noticed I’m only five subscribers away from hitting the round 300 mark if anyone wants to push me over the top, please subscribe to my Full RSS feed or my email updates.)
Wow… Two things..
1)There is so much I hope this and I hope that in your post… Seriously, you should not be doing this if you are going to rely on hope and luck…
2)Rear view mirror and would’ve, should’ve have no place in an investment system / method… The fact that you did not wait long enough, is a rear view mirror type of comment… It really should have no place in your blog, if you intend for anyone to take you seriously…
Anyway, I don’t mean to be harsh, but I feel its better to tell you what I really think…
zino
Zino, I understand your points, but this is a journal of my investing thoughts, not a guide book. I could probably have said “expect” more than “hope”. I think using a rear view mirror is a great way to learn from mistakes. That’s one of the main purposes of keeping a traders journal, to reflect, look back and improve. Looking back on mistakes I’ve made over the years has helped me improve immensely as an investor.
Thanks for speaking directly. All input that is meant to help is appreciated.
I understand, and I appreciate your journal, otherwise I would not be reading it, so keep it up… My comments are made to be constructive and helpful.. Having discipline in investing, is the hardest part of investing, nothing comes close. Learning and changing methods / system is absolutly a good thing… But having discipline is key, otherwise, you will not know if what you are doing will be successful.
Agreed! Thanks for reading.
I don’t think having hope/expectations and having discipline are mutually exclusive.