Today I want to write about market timing. I think there are several ways traders use the concept of market timing. You hear a lot about the timing of entry points and exit points intraday. But I want to focus on market timing in terms of how to position for a specific DAY. No 2 days in the market are ever the same, but there are characteristics that can be observed from certain events that can give clues as to where the market is going.
One event is the jobs report that happened to come out this last Friday and from what I heard it was a good report. If you follow the market you know this report comes out monthly on a Friday, and when it’s good you know it’s going to be a solid up day. Since we know when to expect that report you can prepare for how the market reacts accordingly. On days like Friday the market had the identity that I’ve written has been lacking in the last few weeks and it was planned for.
So let’s talk about how it played out. The report came out and futures went up, and as expected the market opened up and stayed up. If you look at the charts from Friday for the major indices, they were a nice steep climb for most of the day with no major dips. All sectors were a solid green, most of them up over 1%. That is a really good setup for me to find good buying opportunities in my watch lists. So here is what I did:
- Started off about 30 minutes into the session buying AXP($97.702), MTG($13.345) and ORCL($52.72). This round of buys is where I made most of the money because it caught most of the run. Specifically, MTG sold at $14.74 for a really nice gain. Then AXP sold at $99.05 for over a 1% gain. The ORCL sold for $52.7551 for basically even.
- Second round of buys came shortly after for WU($19.9367), AAPL($179.446) and INFY($18.215). This round had WU selling for $20.17 for a nice gain. Then AAPL sold for $179.95 for a small gain. And my only loss of the day came from INFY, which sold at $18.16 for a small loss.
At the end of the day it was a near record day. Had I increased my position size, the gains would have been a lot bigger. So I’m looking into my sizing strategy because on days like Friday I think it can make a huge difference. But that will be a post for another day after I get done with some serious back testing.
As for now I will take the gain and run with it because I needed it. I’ll briefly mention Wednesday and Thursday because they helped shape the week. On Wednesday, I thought the market was going to be down and it moved around one me. So I lost 1.25% from shorting FAST. Also, a .50% loss from shorting BP. And finally one that ended even with PM. Then on Thursday, I didn’t trade because the indices were mixed as were the sectors and I don’t like that. Since I knew the jobs report was coming on Friday I wanted to be patient and not screw anything up.
So at the end of the week I was ahead thanks to Friday, which is great because I needed to get back in the win column. I was right at my weekly goal which is a small win. Unfortunately not big enough considering I’m behind the pace. My closing balance was $28,682.68 so going into this week my goal will be $3,909.18 and building a new win streak. As I write this the futures are up slightly and I don’t have any notable stocks on my watch list reporting earnings. So we’ll see what the market does and I’ll continue to chip away at my deficit. Finally, don’t forget to comment below and also follow me on social media so you can see what I’m doing throughout the week. Thanks for reading and I hope you all have a very profitable week.