We lost our play on the cubs Friday. They fell behind by 5 in the first and never were a threat to win the game.

Only 1 home dog today…and its not even close to a lean or a play despite that the public is pretty heavy on Phil.

So a pass today.

Swing Trades:

We are out of both our swing trades this week. Teva was a push we exited at the same price we purchased the stock at…and wfc ended in a 2.4 percent loss.

An email:

“Great blog, long time follower.

I posted a comment a couple weeks ago regarding future market direction, EW theory, etc.

A suggestion: Why not hedge your reversion to the mean strategy with spy? e.g. long xyz, short spy
Or to be even more market/sector neutral, you could even hedge with sector etf’s. It “seems” like it would be even safer to use a bit of leverage, although black swans of course happen.”

My Response:

I am not sure what the point of hedging with an opposite position in the spy is. If you wish to reduce your exposure you can simply lower the amount of your swing trade when you initially put it on.

I have heard of fund managers hedging with opposite positions in futures for a short time when they feel the market is vulnerable…but have not heard of heading a 3 or 4 day trade. I feel it would be counterproductive.

I went back and checked to verify what historically the returns are on these swing trades and its 1.7%. That would be your expected ev over the long haul per trade.

However the studies are based on a universe of stocks that are much bigger then what I use. And I would think my returns would overall be a bit better. But that is just my feeling since I have made only around 20 trades to date.

Good Luck Today

Twitter: rickjsportplays

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