most important is to keep on playing the game

The most important thing you must learn in trading the market is to cut your losses short and never ever take too big a loss. I know this from my personal experience. Keep drawdowns low ( 5%loss needs 5.3%gain for recovery, and 10%loss requires 11.1%gain for recovery, and 30%loss requires 42.9%gain just to get even, think about it ) and keep on playing the game day in and day out. Remember that "position neutral is A position" and if you stay in the game long enough you make lots of money.

Energy goes from leader to laggard.

http://blogs.stockcharts.com/dont_ignore_this_chart/2011/05/energy-goes-from-leader-to-laggard-xle.html

"calm before the storm"

neutral bias here

Managing Risk.

Mark Minervini suggests those steps to reduce risk.


10 Steps to Take to Reduce Portfolio Risk 
1. Get off margin immediately
2. Raise at least 25-50% cash
3. If you choose to trade, take smaller than normal position sizes
4. Reduce overexposure in any one industry group and diversify more broadly
5. Reduce exposure to high beta stocks
6. Avoid laggard stocks (even if they look cheap) 
7. Nail down profits when you have them (be less greedy)
8. Tighten up your stop-losses (be less forgiving)
9. Sell all stocks that break down in price (especially if they can’t rally)
10.Upgrade in quality and reduce exposure to low priced stocks

mcp