AN IMPORTANT RISK ASSESSMENT WEDNESDAY AHEAD
I developed the concept of risk assessment Wednesday to keep me from myself. When I say "keep me from myself", I mean all of the negative traits that I possess as a trader and investor. I have a tendency to become emotional, greedy and over-confident in my analysis at times. Risk assessment Wednesday keeps me an arms distance away from my faults.
It is also a personal challenge of sorts. I am forced to step away from my analysis and look at the portfolio objectively from a risk/reward standpoint. As you can imagine and have probably experienced, putting your emotions and opinions aside in favor of objective analysis is easier said than done. You must separate yourself from yourself is the best way to put it.
From a risk assessment standpoint the portfolio in its current form is vulnerable. The upside from this point over the next couple of weeks will be dependent on scenarios that fall outside the normal distribution of events for comparable periods. Meaning that we are most likely in for a period of sideways movement that lasts 1-2 weeks. We shouldn't get too much weakness. However, the chances for weakness are greater than any upside move that takes us to say 1250 on the S&P by next Friday.
I'll be taking a good deal of profits off the table in the morning. EDC is up close to 40% since my purchase last Tuesday. Both FCX and JJC are up close to 10%. At worst, I think I will be able to reenter these positions around the current price point in the coming weeks.
I also have a new trade that I may initiate in the morning. I will update on the website and Twitter if I do.
