Nov 4th 2014 – Focus on Winning, Not Protecting

Once again we have another sideways day.  This is exactly what the market needed – people taking profits.  I still feel there is more to come here.  My hope is that I will not see more selling this week and that it will stay static as it has this week or burst higher.  2 sideways days at least were required to consolidate and shake out the weak hands, and now we have had them.

As the quote above says, we cannot be preoccupied with protecting, as it interferes with winning.  Trading to make sure you lock in gains when your system says otherwise is all about being preoccupied with not losing your gains rather than letting your gains continue to grow until a signal comes telling you to exit.

I have found that the key to success in the stock market is not really about when you get in, the trick is to manage successfully when to get out, it’s all about the exits.  As the old trading wisdom goes “let your winners run and cut your losses short”

Market News:

U.S. stocks mainly declined on Tuesday, a day after benchmarks rose to records, as the price of oil slid to a three-year low and Americans cast ballots in midterm elections.

In congressional elections being held across the nation, Republicans were expected to increase their numbers in the House and Senate, although whether the GOP garners enough seats to take control of the latter body was viewed as too close to call.

Brent crude fell to a more than four-year low near $82 a barrel after Saudi Arabia lowered the price of oil exported to the United States, while increasing the cost to Asia and Europe.

The European Commission reduced its estimates for euro-zone growth, projecting the 18-nation region’s gross domestic product would climb by 0.8 percent in 2014 and 1.1 percent next year, a decline from estimates of 1.2 and 1.7 percent.

The Commerce Department reported U.S. factory orders fell 0.6 percent in September.

A separate report Tuesday had the trade gap expanding in September as exports slowed from a record, illustrating the impact of softer global growth on the U.S. economy.

On the New York Mercantile Exchange, December oil futures dropped $1.59 to $77.19 a barrel, and gold futures for December delivery fell $2.10, or 0.2 percent, to $1,167.70 an ounce.

Wednesday:

Earnings: Time Warner, Tesla, Mondelez, Qualcomm, CBS, Toyota Motors, Tim Hortons, Holly Frontier, ING Group, Chesapeake Energy, Duke Energy, Towers Watson, Lamar Advertising, Rowan Cos, NRG, Scotts Mircale-Gro, Whole Foods, Tesla Motors, News Corp, Soar City, Zillow

8:15 a.m.: ADP employment

9:15 a.m.: Minneapolis Fed President Narayana Kocherlakota

9:30 a.m.: Richmond Fed President Jeffrey Lacker

10:00 a.m.: Boston Fed President Eric Rosengren

10:00 a.m.: ISM nonmanufacturing

News Sources:  CNN Money & CNBC