Some thoughts ..

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We’ll discuss this stuff in further detail on Saturday’s webinar but it’s midnight, just got done sifting through all of Thursday’s order flow & now I can’t fall asleep .. If you folks remember, I had mentioned at the start of this earnings season that I really don’t have much confidence in taking full size call positions in individual names in this environment .. Earnings season is a big reason why but definitely not the only one. A lot of the names that have seen the best activity of late are a bit stretched & even though we still have some favorable sentiment out of the “positioning” camp, intermediate-term sentiment is a bit too frothy for my liking. You likely remember me saying that from my past experience, when IT sentiment approaches these levels, markets can still continue higher but things get a lot more difficult. Especially in individual names that are getting ready to report numbers. See, even though the positive “positioning” positioning backdrop can translate into dips getting bought & extra support into any weakness, the snap back rallies are much less broad in nature. There’s less correlation, less participation in individual names. That’s in itself is why it’s prudent not to get too aggressive into hot sentiment on intermediate timeframes. The playbook for this type of climate is to play off weakness or fades & remain as nimble as possible.. At the same time we have to understand there will also be a higher failure rate than usual, even off quality looking order flow & fantastic setups. Because in reality, it’s impossible for the order flow or setup to be high quality during earnings season. Earnings flow can be extremely misleading .. So to sum things up here, I’ve learned to be extremely patient in this type of environment. Over the long run, in order to find consistency, you will have to. Yes, of course I will miss some winners & yes I will still look to play small size to keep myself entertained while I wait .. BUT, one important thing I learned in this game over the years is, it’s the high confidence plays & quality setups where we’re gonna pick up the money.. More importantly, the damage both financially & mentally show up when you try to force “quality” out of poor risk-reward setups.. So if you been spinning your wheels out there & frustrated a bit, hopefully you are doing it with a lot less risk at stake .. And if you have stayed discipline & remain patient for that better setup, congratulations .. In my opinion, you are currently working on & practicing one of the most important factors in finding consistency in this casino, patience!