The S&P 500 gained 10.2% this quarter that ended today, the Nasdaq: a 9.1% gain. With that in mind I had a very good feeling we were going to rally to close the quarter in a big way today. Especially after the GDP came much stronger than expected pre-market and UMich consumer sentiment came in with confident numbers. So what does the market do? A tepid deflation to end the quarter of course.
The moment my primary edge: the cusp trade formed perfectly at 10.13 a.m. I took the trade extremely confident we were going to rally to the close. So much so, I removed my profit target and left the house to run errands and then waltzed back in expecting to see a bumper green number in my PnL column. Alas, I was shocked to see the chart and the R1 in the red.
A lesson I keep having to remind myself about the market: it never does what you expect it to.
My thesis of the market will sometimes come correct and this will reinforce the belief that because I got lucky with a call that I can do so again. But more often than not the market will do exactly the opposite of what I expect it to.
This is where the skill in trading comes in and the resilience of being able to stay with price as it moves all over the chart giving back profits and reversing again and again. Ultimately trading is a skill, a skill where you the trader has to be psychologically detached from what is happening on the chart to make great decisions to lock in profits and take the R1 loss. A skill that takes years to master.
Tomorrow is Good Friday yet the CORE PCE inflation numbers are scheduled to be released at 8.30 a.m. I know on some holidays the Futures markets are open for shortened hours, not sure it is tomorrow though. But I will be at my desk in case it is.
Have a great long weekend folks. If your trading didn’t go to well this first quarter challenge yourself to be better this next one. If it did continue to build on that.