The jobs report provided investors with some confidence this morning and the buyers stepped in to purchase stocks. Looking at the first hour of trading energy is the only real laggard in the S&P 500 index. As noted in the updates the last couple of days the short term trendlines were still in play and the bounce today came at just the right time. The question: is it sustainable? Answer: time will tell! Patience and a defined strategy is the goal to adding and exiting positions as we manage our money. Stay focused.
Below is an effort to share what I am watching as well as thoughts about the trading day. Each morning I filter, scan, read and ponder where we are currently, where I believe we are going, and what opportunities do I see based on the data collected. I scanned my hand written notes from the this morning and I am sharing them to let you see how I set up the trading day.
First, whatever I see of interest I make a brief note on what and why. The up arrows are simply noting a bounce or move higher. Pattern symbols let me know it is a potential pattern trade. Issues are noted relative to the trading day that I want to be aware of. The goal is to keep my notes to one page. Otherwise it become too much and too complex.
Second, I review the charts of each note written. I then want to narrow those of interest to ten or less. I circle them to note those ten.
Third, I will add to these notes throughout the day in red ink what happened… this allows me to develop the story line or opportunity further based on what happened today. This keeps me in touch with my beliefs, thoughts, and risk tolerance during the trading day.
Last, tomorrow morning I start over with a clean sheet of paper. I do not look at these notes until after I am finished with the new data points of interest… and then I compare notes. I have found if I start the day with the previous days notes it builds a bias towards those stocks or sectors. I want to see if anything jumps out at me today as I conduct my research.
The goal is to define my/your habits to get better at the process of managing money. Money management is a process of habits… good and bad. The goal is to eliminate the bad and focus on the good. Find what works for you, but if these notes are helpful I can scan them and post them each day to give insight into my thought process each day. Let me know…
(Click on the link to open the notes)