TVO Market Barometer 9/28/15

TVO MB 9-28-15b

“Whatever doesn’t kill you, simply makes you stronger,” may work well for Batman, but in the world of stock trading it’s more like “It’ll kill you eventually, no matter how strong you are” (or “strange” if you’re the Joker). There will always be days where the market tries to weaken our resolve, and today sure was a doozy, so always protect your capital by limiting losses and you’ll live to trade another day. And speaking of trading another day, the HG was scorching today at +92, so we’ll be initiating another short-term long at tomorrow’s open. Capitulation? Most likely. Over reactive selling? Almost always is the case, but you can decide. With almost 6 straight days of heat, there’s only so much longer it can go without some kind of relief. So why didn’t we just hold our calls and average down? As mentioned, piling on more and more risk will not always make you stronger, and the nature of options is that they lose their value over time. Above all, stick to your plan, and if you’re trying to find strength, try looking on your own doorstep before sticking out your neck. -MD

For more on market volume, The TVO System, The Heat Gauge (HG), or how to trade options follow me on Twitter (@TradingLicks) and StockTwits!