My estimation about the market condition in general...
short term (days): risk on
medium term (weeks): neutral
long term (months): neutral
There is so much bad news in the market and prices are climbing.. guess what happens if we see some good news.. a little firework.. short term, but still a nice chance for some decent profits.
However, I guess the medium and long term conditions are far from ready to be bullish again.
I'm on hold, I don't increase my bets now, I want to wait until Bernanke spoke tonight. However, I think he won't shock the market again, so I still feel comfortable with my "risk on" positions.
So, the market condition in my view is:
short term (days): risk on / neutral
medium term (weeks): neutral
long term (months): neutral
The currently stongest and weakest players seem to be:
+ short and medium term bulls
~ medium term bears
- short term bears, long term bears, long term bulls
Hmm, I think I underestimated the strength of the medium term bears and overestimated the strength of the short term bulls..
The currently strongest and weakest players seem to be...
+ medium term bears, medium term bulls
~ short term bears, short term bulls
- long term bears, long term bulls
This equals a market condition of...
short term (days): neutral
medium term (weeks): neutral
long term (months): neutral
So, we are in a very tricky market environment with a lot of uncertainty. Too explosive to channel trade, but still too weak to follow.. I would suggest driving carefully and use small position sizes.
Ok, out of my short term LONG USD/CAD.. and my medium term SHORT USD/CAD and LONG DAX positions are running well again.
All because the unemployment claims were better (lower) than expected.
I haven't expected better numbers but it is good to see. Especially because they're under 400K. Was a big fight to get here.
Anyway, maybe this is a first sign that we're up for some time with less "doomy" news..
got kicked out of my SHORT USD/CAD position. Didn't hurt much, as I continuously decreased my risk during my current losing streak.
Furthermore, tonight I mentally rehearsed my trading plan very carefully. I always do this when I have long losing or winning streaks. This helps me to stay focused and to follow my system precisely. So, no greed or self-doubt can take over.
Currently I reduced my risk taking to just 0.1% of my trading capital per trade. As soon as my trades start being more successful again I will start increasing my risk.
This approach is a very important part of my trading plan and especially helps me in difficult as well as in euphoric times.
The currently strongest and weakest market players seem to be...
+ medium term bears, medium term bulls
~ short term bears, short term bulls
- long term bears, long term bulls
This equals a market condition of...
short term (days): neutral
medium term (weeks): neutral
long term (months): neutral
So, the market environment remains fairly shaky and I hold up my conservative stance.
Furthermore, I can see that the short term bears are slightly stronger then the short term bulls at the moment. That is, we will probably stay in a downward (bearish) bias for today.
Nonetheless, I'm still long the DAX, because I'm savely in green territory there and my stop loss is trailed to the entry level. I want to keep that position because I still think it's quite possible that we will visit the 6000 level any time soon. I may be wrong, but I won't lose any principal.