Current Trading Plan 6-7-16

It’s important to realize when your current plan may not be working and you need to change tactics.  Your overall assumption may still be correct but the market is notorious for defying logic.

I've been getting beat up with my short play on the SPY and all common sense would say short the market because it's at its highest. The trader’s manifesto is to buy low and sell high but this market seems to want to go higher even when there's bad news.

Since the trend is moving up and this trend has bucked several attempts against it, I got out of my bear call spread and bought an August 19 call at 218 strike price and now I'm finally making money instead of losing money. It's hard to time the market and the other trader maxim is appropriate here, the trend is your friend.

I figured the market is going to go up at least to 214 and I'm still in keeping with my buy low/sell high philosophy because I'm buying low premium.  Maybe that’s the lesson , buy low premium and sell high premium. 

Market Update 5-25-16

Got out of my SPY bear call spread at 50% max loss.  The market conditions completely shifted and I was completely wrong about my short term prediction.  Housing data and strong earnings went against me.  I'm still overall bearish until wages rise, unemployment numbers come down and banks start giving mortgages to people with credit lower than 730.  However, I am short term bullish.  We might see the pullback at the end of the week when people start to go away for the Memorial Day weekend.