XLF update

On December 17th I had done a post on XLF - More upside coming. I had made a case for more upside in Financials. While the SPY had XLF have pulled back since then, take a look at the pullback patterns.  XLF chart looks much healthier as it never broke the 20SMA on daily. Pullbacks after a good run come in two forms 1) Nice consolidation pullback before next big run 2) Topping out pattern. While there are no good indicators to confirm which ones we are setting up for, a stock or chart holding the key support levels after a minor pullback usually is a good sign. I personally think we are setting up for much higher XLF in early part of 2013. Some of the key components of this index are looking really good as well.  BAC turned out to be the top S&P performer for 2012. My personal favorites are JPM, GS and C, just for the quality and fundamentals. Here's a quick review of the charts.

Year in review

Markets had a nice run on 31st to end the year. I closed with highest ever returns on my day trading account for the year in my 3 year trading experience, while the IRA account mimiced SPY returns for the year.

Day trading account - 54% (incl commissions, pre-tax)
IRA account - 14% (incl commissions)

For records my returns for 2011 were 30% and 2010 were about 14% (partial- year).

Btw, I should thank you guys as well. My returns for December were great and I attiribute it me being more organized and dilligent since i started writing the blog. Planning your trades and executing per your plan is key part of being a successful trader.

Hope you guys benefited from some great calls in December. Finacials (C, GS, JPM), CLF, FSLR NEM were some of the great calls. CLF is up >35% since my post on Dec 3rd (CLF - Positioning for a bounce) and  FSLR is up 20+%

While I had some great trades throughout the year, losses on some of  the trades pulled the returns down by quite a bit (e.g. lost $30 on ISRG in a day). I'm setting some simple trading goals for 2013 that  I will try to follow dilligently.

1) No setups no trade. Focus on quality setups.
2) Set stop loss targets for each trade.
3) Minimize the number of trades (i tend to overtrade, which usually results in sitting on some average stocks)
4) Always have risk/reward in your favor.