The Dow is in a Doji candlestick pattern mid-day, showing uncertainty as traders quietly battle around the 12,700 - 12,750 resistance area. The economic reports this morning were mostly in-line with expectations. The summary goes like this: consumer spending continues to hold up, and the economy is crunching along. The data suggest that the economy is neither caving in, nor incredibly robust. Sound familiar? This is what my analysis has been suggesting since January, when the news marketers were screaming that we were in a recession. So far, Alan Greenspan, Warren Buffet, Jimmy Rogers, and most major news organizations and political structures have been wrong about the economy. This continues to be another major lesson in why you should do your own analysis, follow the charts, and trade what you trust. Ignore the posturing and positioning of the people who are trying to sell news or gain political standing and trust what you see.
On the short term the market looks like it could be running out of steam, so I am nibbling in on some puts. I picked up a little more with a nibble on KSS. I also culled back some more of my Energy and Commodity stocks, although some of those stocks look like they still want to run. I sold BTU for a .05 cent gain, so basically a breakeven trade, I sold NOV for a .48 cent gain, and I sold MEE for a .58 cent gain. I still want a little exposure to Energy and Commodity stocks because some of them (like FWLT) look like they still want to swing up a little.
Most of the bullish movers I noted yesterday look like they are finishing out the move today, so if you have made some money, look to lock some of the profits down and tighten the stops.
1:30 pm MT: Here are some interesting Bullish Movers today: FWLT, FLR, TDW, PXD, LDK, DHR, ENER, and BEN.
Steel, Coal, and Tech are some of the better performers. Energy stocks and some Commodity stocks appear to be settling down and shoring up just a little as well. Retail and Financials are underperforming a bit today. I went ahead and nibbled a little on PXD calls.
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Gary, thoughts on NOK...
ReplyDeleteI've been stalking it for a put play, too, but that $28.00 level has acted as strong support since March, and the doggone thing keeps bouncing up from there. Yesterday it closed at $28.02! Pffft!...
If you decide to play this one, watch that $28.00 area...
Delaware, my continued thanks for this wonderful community!
Dwight and gang. Any thoughts on GS? I watched the 15's and cherry picked mid-day when it dropped below $177.00
ReplyDeleteI echo Krytal's sentiments, r.e. thanks for this community.
Bob S.
ReplyDeleteI've been watching some of these financials for put plays because I think some are flagging nicely. GS is pretty close to resistance (I see it around 179-181 area) so cherry picking may have been OK. You can pick up the rest if it gets in that area. For me, I am waiting for confirmation in this environment before I get into these.
Cherry picked GS puts too, almost at diagonal resistance, target $172ish, next $165. Wish there was more volume though.
ReplyDeleteThanks dwight for a great community to share ideas.
Sung
Krystal,
ReplyDeleteI'm playing NOK as a descending triangle with an 8-10 move below 28. My entry today at about resistance (28.72)was A D.A. cherry pick with little risk and a lot of downside. I think that the only thing keeping this alive is the NAZ.
Dwight,
I haven't sold any of my energy yet but have moved my stops to breakeven.
Bob,
Rumor has it that this market may swing from energy to financials. GS is a strong stock, but who knows in this market. I'm riding my June 195 for all it has. Please don't laugh,it lookde like a good trade at the time. Besides, this is another round with GS for me. Don't ask,Dwight was tired of me asking him about it every other day.
Gary
Gary, Krystal and Sung,
ReplyDeleteI cherry picked GS partially because of that beautiful flag that Krystal mentioned, the horizontal resistance Sung talked about and because Dwight mentioned cherry picking Index puts yesterday. Gary, I use the CNBC gadget in the TOS platform (don't have to pay for cable) and heard about the rotation into tech, but the same guy said traders were afraid of financials unless the really took a dip.
Dwight,
ReplyDeleteYou are constantly looking at your plays, so I'm assuming you are using mental stops? I use mentals unless I'm away from the computer, then I put in automatics.
Joe
Joe,
ReplyDeleteBeing an inexperienced trader, I find it hard to make split, non-emotional decisions in a crunch. I like to look at my stops and targets, then highlight the areas on the charts to make my life a little easier, especially when the market fades fast. I also trade four accounts for myself, wife and children, so it's not easy stopping out of various position sizes simultaneously.
Gary
Hi!
ReplyDeleteAll of you make me laugh when I read your comments...Krystal that one day when you said you were sharpening your saw regarding the market going down and then today you are stalking GS.
We go from being moms one minute to stock traders the next!! : )
Joe: I've been using mental stops as well because I watch my trades all day. I like to because I just treat it like it's my job.
Gary - I said the same thing not long ago "its hard to make split, non-emotional decisions in a crunch".
You will probably think I'm nuts but Sometimes I have to tell myself OUT LOUD "TRADE THE CHART!!" I'm starting to let things ride longer than a day because I am allowing my technical analysis to work for me. It is so hard to learn how to trust the system that you created and backtested.
Hey, did anyone trade JOYG today?
WFT broke through resistance it was something i suspected would happen and it did today.
Sorry the last comment was from Denise!! Totally forgot to put my name - duh
ReplyDeleteGuys,
ReplyDeleteI seem to be getting credit for mentioning GS... But that was actually Mrs. Christina. Although, I am flattered to be mistaken for a stock-pickin' genius!
Here's the type of super smart things I do: I missed the entry on GMXR on Friday at about $40.00 (old resistance from May 2007, new support), and didn't take the entry on Wednesday in the low 40's because I still wanted to get it closer to $40.00. Now, today, the stock is up 16%. And here I am sitting at my laptop with a kleenex and Haagen Daas.
Fine. Be that way...
Stoopid Market.
(huff)
:)
Dwight: I am glad that I heard you say that recognizing key patterns (such as cup and handle) are not THE most important topic to being a professional. I like hearing these views because I am trying to decifer what is key and what will help me the most every trading day. However, the candlestick patterns are something that I have been focusing on lately....Also, I am noticing and avoiding "chop and slop" when I see it, AND I take off and hide studies more often as another way of saying what do candles and volume alone tell me? Prior to hearing your virtual coaching I was scared out of my mind at swing trading, in fact another faithful follower of yours that introduced me to you, would testify that I would only trade spreads because I petrified as to how to pick a direction and trade this style, but now this is all that I do everyday. I am discovering more and more that I can be profittable. I had 10 trades going on today...5 were true winners, 1 is a stupid self induced disaster, the other 4 are going my direction but will give another day or so to decide if I should stay or go. Thank you for helping my confidence level increase by a HUGE amount! Denise
ReplyDelete