No trade for the past few days

Market formed a V shape from the thanksgiving week to Friday this week. We saw a big up and down swing in the passed ten days. Things changed really quick.

I am losing my trading energy and momentum in the past few days. I stay in cash from Wednesday last week. I closed my short position on 11/18 and initiate a small long position in TNA. This long TNA position gave me a big draw down, which I closed on last Wednesday resulting a 12 percent loss. And I shorted SPXU and added TZA on last Tuesday after market. The big gap down on last Wednesday(11/23/2011) lighted me down. Initially I thought the thanksgiving week should be very bullish. But in turned out to be 4 down days in a single week. I was up 10 percent for my trading account initially, then I was down another 5 percent one week later. That was my big trading problem - I cannot hold my profit. To rest for a while in trading is my goal.

This week, SPX is up 7 percent, which is dramatically different from the thanksgiving week. Last week it is the hell for the bull, now bull cheers. I hate the big gap up and gap down these days. I am not good enough and do not have enough time to trade for intraday opportunities. Stay cash is my position.

This Friday my timing model initiate the long signal. The short position from 11/15/2011 was closed. The last short trade is still profitable ($COMP down 2.21%) given the great bull run this week. But if long TNA or FAZ from 11/15, it was a losing trade with 2.30 percentage down. The timing model is not perfect for the short trade. For the short trade, one needs to cover at the low to take profit quickly instead of waiting for the long signal to cover.

Haha, why the timing model works? Today I performed a statistical analysis on the timing model's input and output. I found out that the input and output of the model are highly linearly correlated, which gives p-value <0.0001. This explained why the timing model can be used as a predictive tool.

Will we see another gap up to pass 200MA decisively next Monday without a pullback? Let us see. I wish to see a modest pullback to retest 20MA.