Hi Everyone,
My apologies for not doing these in real time; my wife is prego with twins and we had some medical issues to deal with, but everything seems to be ok for now.
It has been an interesting couple of days in the market, and my timing for this demonstration couldn’t have come at a more volatile time:
– a 15% spike on the VIX.
– A 3% down day (S&P 500)
– A 1.5% up day (S&P 500)
The Market Correction has finally arrived?
I’ve been stating for weeks that the S&P is looking very top heavy. There is now clear divergence on the MACD, a rise the extreme lows on the VIX, and established a clear over head resistance at 1040. This is a very important level to watch for the next couple of days, as it could provide the resistance necessary to confirm this current pattern as a short to mid term top in the market.
Status on the Live Trading Example using the Profitable Stock Exit Tool
When I started the demonstration for the profitable exit tool, I balanced the portfolio between long and short positions. At this point in time, if it were my own portfolio, I’d probably change that ratio to 3 to 2 in favor of short positions.
As it turns out, the tool is starting to push us in that direction. RDN was stopped out last week at $9.25 for a total loss of $538.48.
The current net profit in the portfolio stands at -$163.43
| Symbol | Position Type |
Position Size |
Entry Price |
Stop | Target | Current Price |
Current Value |
Change |
| HIG | Long | 87 | 28.62 | 24.22 | 38.20 | 26.25 | 2283.75 | -206.19 |
| MTG | Long | 313.00 | 7.99 | 6.19 | 14.14 | 6.72 | 2103.36 | -397.51 |
| ener | Short | 210.00 | 11.92 | 13.93 | 10.06 | 10.97 | 2303.70 | 199.50 |
| NVEC | Short | 46 | 54.26 | 61.97 | 45.52 | 50.77 | 2335.42 | 160.54 |
| ame | Short | 71 | 35.00 | 37.41 | 31.68 | 33.87 | 2404.77 | 80.23 |
| Total Risk | Net Profit | -163.43 |
What to look for in the stock market and our portfolio for the next couple of days
Overall, including closed positions, we’re down $701.91. Considering the volatility in the markets, being down 4.6% in our trades, and 1.4% in the overall value of the portfolio is reasonable and very manageable.
It will be interesting to see which direction the market chooses to take. A strong break above 1040 or below 1020 on the S&P will give you clear direction on where to trade.
If that direction is down, I would expect our remaining longs to be stopped out (although I hope HIG holds on), and our short positions to increase in profit. If the market can sustain a bearish mood, we can easily turn this portfolio profitable.
New Trailing Stops
HIG – 24.22
MTG – 6.19
ENER – 13.93
NVEC – 61.97
AME – 37.41
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