My trade going into the Greek elections is to stay in cash as I have been almost all week. I am not disappointed this week I will let the day traders make their money in this market and watch the bears get mauled by central bank interventions while I sit on my 1st half of the year profits. I am waiting for a money making trend not a dollar scalp here and there. I want the odds in my favor, I want to be long as greed grows for profits in a stock and I want to be short as fear drives more sellers to give up and get out of a stock. I want to be on the right side of a trend for a stretch of 10-20 days what ever direction that is, right now there is none. The consensus seems to be everything will be okay and the EU will do what ever is needed to keep Greece in the Euro. The leaving of Greece would be unthinkable and is NOT priced in from looking at option premiums. What a full bond default from Greece and exit from the Euro would look like is unthinkable. The bets appear to currently be that it will not happen. But it is impossible to know what could happen when you are trying to get a group of countries to agree on anything.
Every trader has to trade their own plan. Mine is to sit out big events with unknown outcomes so I am in cash. Mechanical trend followers have to take their signals, winners sitting on big profits have to honor their trailing stops, CAN SLIMers have to wait for the right follow through day. Gamblers will bet on either red or black, some will win big and others will lose big.
Depending on how Monday looks at the end of the day I will likely take a position in the emerging trend if we get a break out and hold of the markets current range with the $SPY locked in a $134/$131. if the up trend resumes I like $AAPL long above the 50 day $MNST long at the 10 day and $CSTR long with a break out of its base.
If a plunge ensues and things get wild I will look at $FAZ options and $SPY Puts to play short. I will play small with options for minimum risks, I intend to finish this year with my account up between 75%-100% and gambling is not going to get me there.