Post Election Letdown

By letdown I am not referring to the election of Barrack Obama, but rather just the letdown that occurs after any kind of emotional life event. Examples include marriages, births, deaths, sporting events, retirement, etc. The market has rallied into this election event on declining below-average volume, which does not support a continuing rally. Just as the Dow made a new closing low on 10/27 without penetrating the 10/10 intraday low, it could be that we are seeing the end of this rally with a closing high above the 10/13 closing high that does not penetrate the 10/14 intraday high. The only thing missing is waning momentum. The 50dema looms ahead and is an attractive target, but there is no law that says it has to get there.

So far only one of the intermediate term systems in the System Tracker is long this market, the others remain in neutral or short positions. The monthly-weekly-daily system exited yesterday on the open and has a year-to-date gain of 56.3%, not bad with only 4 trades. The 3 week system remains short and is not far behind with an open gain of 53.75%.

One of my ongoing goals is to become more effective and efficient as a trader and in other areas of life. I know that I work harder to achieve my goals than I have to. While my personal performance has exceeded the above, I have worked much harder for it than 4 trades. The question is, where is the point of diminishing returns? How much does short term and intraday trading add to the equation for the hours required versus the risk of levering up an intermediate term system? I don't know the answer to that question, yet. For now, I enjoy watching the markets and analyzing the possible and probable outcomes too much to not be involved on a daily basis. For those who aren't into the markets like some of us are, the point is that it doesn't take that much work. For sure, this years results from the System Tracker will be skewed to the high side more than most years, but for those who are content with consistent average to above-average returns, 4 to 8 trades a year is really all it takes.