Normally I’d title my entry “Trading Update”, but I didn’t place any trades this week, as I’m still kind of mired in my trade from last week. I’ve been waiting for a pullback that has yet to happen. The market has been on a roll and today the Dow has reached the 14K mark, a level not seen since 2007.

It’s kind of amazing where the market is considering the state of the economy. The “old” me would have shook my fist and railed against the illogical market and that it was only a matter of time before reality would hit. The “new” me pays little attention to current economic news for the most part, knowing that market behavior can often be out of sync with what we consider reality so it’s best to judge the market by its own behavior rather than comparing it to current events.

Take today for example – the jobs report showed a less than expected number of jobs created and the unemployment rate edged up to 7.9%. The market took that in stride and rallied over 1%. Definitely counter intuitive as those are typically bearish signals, but the market always has the last word. A lot of Bears threw in the towel this week, which is a good sign at least a short term top is near.

The good news is despite my negative position  in the market, I know what my exact errors were and what I should have done in taking on this position. I “thought” I knew what to look for to confirm a trend change, but it wound up not being the case. But now I do know and updated my methods to reflect that, which will make my trading more profitable going forward.

In the meantime I have to wait until next week to see if the market finally starts pulling back for a breather, or continue to power forward, requiring me to start closing out positions. All my analysis points to an imminent pullback, but the fact that we’re near all time highs may give the market more staying power.

The lesson of the week is the same as last – “The trend is your friend, until the very end. ” Staying with the current trend would have resulted in some highly profitable weeks.