Stock Journal (05.26.2020)

Often times I see myself as a degenerate gambler when it comes to trading stocks. Reason being is I basically put money down on something I am predicting. Whether it comes true or not is still an unknown and I have no control over it. All I can do is find the higher probability of something that is to happen happen.

On Friday the charts I read led me to believe the spy was going to hit at minimum 300 and here we are. Of course the key to not be a degenerate is to take gains and NOT GIVE THEM BACK! I post here to mention that early in the morning I closed out my long position and will be watching for SPY to retrace or continue going up and be ready to play a counter trend. The likelihood if SPY continuing up from here is less since there are less bears to squeeze, but then again I am only assuming.

Tech Starting to Weaken

Caution is warranted since FAANG stocks are weak after the open. Amazon, Apple, and Netflix are red while Facebook and Google are barely holding in green. This can still change as the day progresses but since the SPY has risen over 2% the tech stocks may be a foreshadow of what is to come. We will still have to see if QQQ can get over 235 and have a new all time high. This will be bullish for stocks in general since the FANG are leaders of this current uptrend in the markets.

Bonds are weak but...

Bonds are not doing so hot as today it got another 2 point down on the TLT but $162 has been a decent support. If support gets tested multiple times it will likely mean more drop to come so question is will it bounce or drop. The bounce scenario seems more likely since MACD is flattening. However momentum is lower so challenge here is bulls of bond needs 162 to hold. If not further fuel to the fire to go long indexes.

Gold down is good for dollar

Gold price seemingly looks ready to crash as both RSI and MACD are sloping down. This maybe just a retrace since the bullish run it had, but I would not be long gold now. If gold is weak it usually means dollar strength. The unknown though is if the dollar is really stronger since the FED has be printing currency through the use of buying Treasury bonds. My opinion here is to scare out weak hands in gold so that the stronger ones can buy. Hence not bullish for stocks even if commodities are selling off.

What I am doing?

I am pretty much flat but will be looking to enter shorts if QQQ can get to 230-235 depending on how that looks. If markets simply sell off from here I will have to look for a bounce to short as I won't be chasing. A good reminder for bears is that this bull run from March lows have created a lot of pain for holders of short. For that will only go in small positions if shorting.