I wrote February 3rd (Overhead Cradle Resistance for the SP 500 Feb 3 | Afraid to Trade.com Blog ) that I was holding a short position. In fact, I’ve been holding half the position since January 29th. The other half was put on Feb. 1. Since that time I’ve been underwater for most of the time.
Why did I hold on to a losing position? Let’s start with the positions and why I thought they were the right buys.
Both were March 45 Puts on the Q’s.
Both were bought based on short-term technical indicators using longer-term triggers.
Over the last five trading days, both positions have been profitable or under water.
Both are well profitable as I write this ( 3:50pm CT approx.).
So I was asked (by a mouse of an investor) why I held them through the under water periods. “What was I hoping for?” There was no hope involved. I believed my trading strategy was sound and my charting was correct. But beyond that, I also was aware that every time the government said something the market took it poorly. That was the exact opposite of what was happening during most of 2009. That single indicator, which I haven’t a clue how to chart, has been the one of my most useful of indicators.
So at this time I’m still holding my puts. I will because the market has been confirming my trading concept every day since I put the positions on. That I can chart. No hope involved. Take that, mice!
TTAM February 4th, 2010 $159,105/7955.25% unbooked because of my two open positions
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