Model Portfolio Update - Week Ended 12/11/09

The markets were mostly flat for the week, with the S&P 500 up only 0.60 points. Volatility was also low as the index traded in a narrow 3% band for the week. This lead to a difficult trading environment despite my model portfolio's exposure to both the long and the short side. The model portfolio was thus down 1.4% for the week. It was a quiet week in terms of the number of trades I took (14 in all... 5 gainers and 9 losers). The biggest gain came from my 7 point gain in my AAPL short, which had a timely exit since the stock rallied strongly to close the week. Losses were mostly minimal, with the largest loss coming from my small position in JASO, which I had entered into too early on the second day of its current four-day correction. I'm still holding that position since we may have a move to the upside coming given the controlled manner of the correction, and it is still holding above its previous resistance. Check out my other stock positions below (click on image to enlarge).
For the upcoming week, the key is still to watch the 1,084 to 1,119 trading range for the S&P 500. I would say that so long as we are holding above 1,084, the bulls still have the advantage despite the many indications of waning momentum in the markets and the rally in the US dollar. So be open to strategies both on the long and short side, with slight bias to the long side.
To learn more about trading psychology, and how to use the various technical indicators, try a free e-mail trading course here.Since inception (9/30/2009), the model portfolio has a hit ratio of 33.6% with reward:risk ratio of 2.65:1. It is down 2.6% compared to a 4.8% gain in the S&P 500.

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FD: No personal position