Well, when everyone
expects something in the market, you usually get the opposite.
Yesterday's snooze of a session offered few opportunities, albeit there were
some. Perhaps we are entering into a phase of the market accompanied by low
volatility? By the end of the week we will know more. While I only did one
trade yesterday (I am sure there were more opportunities, I just was not
aggressive) the game plan remains the same:
Seek smaller gains on larger share size. I have
been gravitating toward lower priced issues that are thick and relatively
methodical. Names like AMD,
EMC, AOL,
TXN, NOK
are good examples. Sexy and exciting? Hardly. Profitable if approached with
diligence and patience? Yes.
Remember the chart from yesterday's column, the
one that showed the average true range (ATR)? That is what we are dealing with
folks, until something changes, hitting singles and doubles is the name of the
game. Just to give you an idea of what is going through my head presently, look
at the email I sent out to my subscribers last night:
As discussed in the room
today, when all market participants expect one thing, the opposite usually
occurs. Today was no different. Yes there was a run up to new highs in the
last hour, but for the most part trading was quiet.
While it is too early to
draw any conclusions, let's consider the following:
Is it possible that we have entered a
phase in the market where volatility will remain subdued?
Absolutely, although at this stage
that seems like a premature conclusion. Nonetheless, I am preparing
accordingly.
You will recall that we managed to
"survive" the summer by taking trades in slow moving, thickly traded stocks.
While boring as dirt, they did produce respectable results during July and
August. Going forward, myself and Bo will be monitoring more stocks intra-day
that fit these parameters. It seems likely that we may need to have 2 or 3
such trades on simultaneously in order to really maximize what little moves
there are intra-day.
I had already begun
re-fitting my system for (4) 19" monitors (up from 3) and will complete that
this week. Bo will have the same set-up. Through the additional screen space
and interaction, I envision bringing you more intra-day ideas going forward.
No, we are not reinventing anything,
just making some subtle adjustments to what might be a change in the tone of
the market.
Feel free to run
questions by me in the room tomorrow.
Technically, there was a milestone achieved
yesterday, a close above 9504 in the Dow. This represents a close above the 50%
retracement of the 2000 high and the 2002 low.
Depending on the activity today, I will share
with you some of the trades that I took during the day and review the parameters
and rationale for each.
| Support/Resistance
Numbers for S&P and Nasdaq Futures |
| S&Ps |
Nasdaq |
| 1037 |
1388-1390 |
| 1027 |
1377 |
| 1026 |
1365 |
| 1022 |
1344 |
| 1017 |
1322 |
| 1010 |
1311 |
| 1008 |
1297-1299 |
|
As always, feel free to send me your comments and questions.
Dave
