Interesting Day..

8:30AM EST The retail sales and jobless claims numbers this morning had a firming effect on the futures this morning. I have a hard time believing that is going to truly affect the market for any length of time today. I think we will close lower barring any big market-changing news. However, the bulls like to see that something is having a positive effect on the market. In the past month or so, the market has taken just about everything as bad news, so a positive effect from economic numbers is encouraging for the bulls.

People are looking for things to stop getting worse. The economy doesn't have to look rosy for the market to get better. It just has to stop getting worse. I think we are a still a little way off before we can look for a sustained rally with any substance. The economy will definitely still be in a recession when the market turns higher for good. The big question is when will that happen. I am not sure of that yet, but it feels like things are not getting dramatically worse - just steadily worse.

My (DIA) trade is getting closer to being profitable. I was buying on the way down and my average cost is a little over $70. A couple more points higher and we are in business. As with any trade in this market, I will be looking to take some profits quickly. I will start to take some off at a 5% gain. There is no need to be a hero here. Profits are profits. Anyone who follows this blog on a regular basis knows I am not a huge fan of taking a bunch of risk. When I can get a position profitably into cash, I will take it. I know I will not pick an absolute top or an absolute bottom. I am ok with leaving some profit out there if I can be sure to get my money back.

If you are still fully in the (FAS) trade I gave you on Monday. Please... Take some off. Please. You don't need to be completely out of this trade but you have to take some risk off. My suggestion would be to take about half of your position off and then put a stop in at your original purchase price. This allows the trade to breathe a little, but you have some profit already banked and there is no chance you can lose any of the original risked capital. That is the kind of trade I like.

No one ever went broke taking profits. In a market that can turn on a dime, taking profits is more important than ever. Until next time, stay low risk..