Start of July Gains

July historically is the best month of the year for investors recording the biggest gains. There can be a myriad of reasons why July turns out this way for gains in the market. Some speculate it is due to the beginning of the second half of the year bringing in a wave of new capital to be invested. Others theorize it officially begins summer when people take or plan vacations putting them in a more positive mood. Whatever the reason is it is not to be ignored the historical fact of July returns.

         In an attempt to capture the goodies of this month, I entered some short-term trades with the plan to exit before September. The first trade I entered, which I’ve been in for almost 2 weeks now is DIA. DIA is an ETF that follows the Dow Jones Industrial indices. A collection of large market cap stocks that are presumed to make up the entire American economy and are closely followed by many investors and economists alike. On the technical side, it presented a triple touch of resistance which is one of my high-probability setups. My expiration is September 20, 2024.

         The second trade I am in is QQQ, an ETF that follows the tech-heavy Nasdaq. Comprised of some of the best tech stocks this is a predictor of where the tech industry as a whole is moving. With an amazing bull run so far this year, QQQ’s year-to-date returns are above 15%. Having missed out on the first half of incredible tech gains I knew I had to get a small share this second half. A 3-day pullback occurred as tech stocks reacted to Triple Witching, I found what I saw was a decent entry to capture gains in July and took a position. Expiration date September 20, 2024.

         The third trade I am in is META. A behemoth of a tech company that unfairly had a large drop in their last earnings announcement. Once again, having missed out on the potential rise from that drop, I wanted to capture some gains. It is below its all-time high of $531, leaving a bit of room to keep going up. It also presented a bullish engulfing candle which is a sign of a continued bullish movement. I entered a trade with expiration of Aug 16, 2024.

         I did have a failure of a trade with MU, Micron. A semiconductor stock in an industry that had a meteoric rise so far in 2024. They had earnings to announce, and I gambled on investors pushing the stock up on earnings release. They did beat it and provided guidance that was in line with expectations however, that was not enough as the stock dropped overnight and continued to decline the following few days. I am currently down over 60% and looking to cut soon. While nothing was wrong or alarming with the earnings report, we are now in a market that has changed expectations of returns and gains. Historically 7-12% gains were considered good and what people sought after. Nowadays the same 7-12% gain is not enough to satisfy the hunger of the economy. People see the large gains by Bitcoin, Nvidia, Microsoft, Chipotle, and Eli Lilly, and they want those same gains from everyone. If you can’t deliver them, then they are on to the next hopeful move.

         While I have lost on earning plays more than I have gained, I knew it was a gamble. I told myself months ago I would never play earnings again, but FOMO has played a huge part in my trading as of late. Getting in a slew of bad moves in the first half of the year has skewed the vision and plan of execution as I found myself chasing trades knowing those who chase never catch what’s running away from them. I need to stick to a strict strategy that is proven and generates money for me. As my account dwindles from the losses and trades I enter the remaining 6 months are likely a make-or-break for my trading journey. Will I stop forever, no, but I may pause to regather funds for my account if it goes belly up.

(Please note this article is not investing or trading advice. Please do not take any trade or investment based on my experience or content being posted. I am not a professional investor, trader, fiduciary, or financial advisor. All information in this article is for entertainment and reflection purposes only.)