October 28

I had limited time to sit in with the mkts today.

However, I took a two position practice-trade in MCP long near the final consolidation phase of the day; also near the lod. My thought was that it felt like the reversal of the big drop was waiting, mainly because there was so little profit-taking all day, relatively speaking. Unrealized Gains of this magnitude today by the shorts would have to be booked, if the trader had any good sense at all.

And that is where the reversal trader pounces.

October 27th

Here is the buy-to-cover of my CMG practice swing-trade from last week. More drop coming? Yeah, I think so. Am I greedy enough to hold a stock that has some gains sitting there? No.
It appears that I picked a good time to cover, in the short-term. While I write this commentary, price is continuing to rise after my exit. It now sits very close to what was my average share price.

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It's more about being correct in my read of the stock price; reinforcement of the notion that what goes up, must come down (at least to some degree).

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*** UPDATE: It's end of day and it looks like I got the bottom candle of the day on my exit and the full breakdown didn't occur. Perhaps over the next week or two? I'm out and moving on to other stocks, but this one bears watching...

October 22

I was able to watch the markets for a bit yesterday, though very distracted while doing so. I took a paper-trade short in TNA and was able to take a winner out of it, though I gave up some gains by missing the bottom and covering during the start of the retracement of the move I was playing. I consider this approach a positive one... I normally would just cover and run much earlier than I did but I consciously decided to hold. I actually started to feel the momentum shift into a reversal and exited. Much is to be learned by staying in my practice-trades during the reversals of trend instead of anticipating the reversal and getting out prior to it. Patience derived from confidence that my momentum reads are accurate is just one more step on my journey. Let's see if this develops into habit.

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I found CMG through a reading of Scott F.'s post and decided to take a 250 share (25% of my standard trade of 1000 shares) swing-trade short to capture the profit-taking move that at some point will accompany the monster run-up. Recent price surges on substantial volume (April 22, June 3, and July 23 were followed by price retracements. The most recent surge on September 1 did not, however, so maybe the longs are getting cocky!?) Let's see what happens going forward. I am willing to wait for this one to crack and fall. With one-quarter of my traditional investment, I will consider averaging for a better price in 250 share (25 %) increments if it moves substantially against me. I will add more aggressively to the short when it goes into the black, if I haven't yet accumulated 1000 shares (one full position) when the breakdown takes place.