The Fed Aftermath and a FAVORITE Trade

Hey Y'all, as expected yesterday the Fed did BUPKIS to the interest rate which was to the surprise of no one. As I mentioned in yesterday's post, that was not going to move themarket, but what was in the Fed's statement that would. I was right, but I was confused as to why. The Fed's statement lamented on inflationary pressures still present in the economy, but there was something in there that put the Bulls minds' at ease, and they ran with it.

From the chart you'll see that we broke both Horizontal Resistance, as well as broke above the 30DMA. I have highlights where I believe the market will stall out before declining again near May.

I am a little upset with myself in that the big $240 point drop took me out of a lot of positions that would be really profitable today if I had got back in the next day, but since I felt the correction hadn't ceased, I played it safe. You live and you learn...and a cash position in times of volatility and uncertainty isn't a BAD thing either.

A FAVORITE Trade - CLF

Notice how I did not say "favorite STOCK?" As I mentioned at our last meeting, I DON'T LIKE STOCKS! Why? THEY DON'T LIKE ME. Heck, stocks don't even know I exist (kind of like the Head Cheerleader in High School, but that is a story for another time). I don't care about the stock, I care about the Trade. Does it fit my rules? Does it have good Reward/Risk. Am I confident in the trend?

Honestly, I don't try to follow too many stocks...too much time wasted on companies that don't present good opportunities. I like to focus on about 250 stocks and just keep waiting on them, and playing them over and over and over again. I become familiar with them, I understand their opportunities and their risks. Most importantly, I am comfortable and confident with these trades, which makes them more effective for me.

If you can find trades like CLF that you play over and over and over, and even wait on them when they go through their down cycles or play shorts/puts, then you' find a comfort zone and increased confidence...and make money along the way.

Finally, I want to mention this is OUR BLOG, not mine. I HIGHLY ENCOURAGE all of you to submit ideas. By having more eyes on the prize, we can ALL get great ideas for trades. We are not competing against one another, this is a PARTNERSHIP and I hope no one is afraid to submit an idea. We will ALL learn along the way, make some mistakes and make some winners.

Let's have fun doing it too!

Happy Trading!