We didn’t get a meaningful improvement in headlines over the weekend, but after eight of the previous nine trading sessions ended in the red, a green day was inevitable.As everyone knows, stocks don’t move in straight lines. After a bit of down, it was finally time for a bit of up. It doesn’t matter why. Running out of sellers is just one of those things that happens naturally. And Monday was that day.
I have no idea if Monday’s bounce will stick, but it was a good start, and that’s all I needed to put on a partial position. Start small, get in early, keep a nearby stop, and only add to a trade that’s working. As I frequently remind readers, buying bounces is hard because two-thirds of them fail. But if we limit our losses on the false starts by entering with partial positions and keeping stops nearby, riding a winner higher with a full position will more than offset any previous losses.
But if the index bounces a little further today, I will lift my stops near my entry points, turning this into a nearly free trade. It is hard to complain about that.
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