On November 8, I was 100% in cash. The market was lacking direction; my set-ups were not working, I couldn't find an identifiable trend to trade, and the world was borderline psychotic about who should be the next U.S. President. This added up to uncertainty. Markets do not like uncertainty which was confirmed by my observations that breakouts were immediately retreating and not following through. Hence, I went to cash.
The truth is, I should have gone to cash much sooner. My set-ups had not been working for weeks due to the market chop. I even wrote an open letter to trading psychologist Dr. Brett Steenbarger about my inability to stay inactive. And he responded.
But things change quickly in the markets. The post-election rally appeared and, by November 10, breakouts were starting to follow through again. You can't predict this stuff. Over the years I've learned that it is possible to react to price but it is impossible to predict what the markets will do next. A post election trend has appeared, prices have confirmed it, and I will be trading it…until things change.