I apologize for the short notice, but I want to hold an impromptu meeting to discuss how to manage one's holdings when a market goes to 'correction'. IBD is specific about what to do if you have large gains: take partial profits and decide if you're going to ride out the storm. If you have miniscule gains, sell so that they don't turn into losses. But what if you have a gain of 7-10%, falling in neither category? What if you have a strong conviction in a stock? In a correction, an IBD investor should not be buying stocks. However, in a correction, IBD does not say an investor must sell shares.
Imagine my frustration after buying shares of CBOE last Monday, one day prior to the market going into correction. What was the proper next-step to take? I had neither a gain nor loss. I asked myself, Should I unwind my position tomorrow?
I also had AMBA in my portfolio, with a +10% unrealized gain. Cut-and-run or hold through the storm of as-yet-undetermined length.
There was no right answer. I would not have been happy had I sold and watched my stocks continue their ascent. And I would not have been happy had I held, only to watch them break down. The only thing I could think of was to see how institutions were managing their positions.
When we meet, I'll go through the intraday trading on Tuesday, 6/11, and Wednesday, 6/12, and show you what I saw that gave me the confidence to hold my two positions.
Due to the 4th of July holiday, we will not be meeting on that particular Thursday. Instead, we will meet on Thursday, July 11th. In August, we will resume meeting on the first Thursday of the month.