In The Know
Make sure to register for the
upcoming course “The Baker/Ten Electronic Trading Course”, starting
July 7. Click
here to go to the registration page.
My latest trading lesson, Finding
Intraday Trendlines for Daytrading Part I, is also available now.
What if I told you that I knew a guy who knew the girlfriend of the guy who
was the orthodontist who put the braces on the daughter of this woman who once
saw this other guy at a restaurant talk to a waiter who new the exact same pool
man that had coffee each morning at the same doughnut shop of the individual who
was responsible for driving the delivery truck for the suit company that
manufactured the clothes for the guy who ordered the paper that the Fed used to
print its decision on?
With this type of serious inside information about the announcement tomorrow,
would you pay me a million dollars, knowing that it would improve your trading?
If your answers is yes, once again I have some lovely ocean front property in
Kansas I’d like to show you.
With everyone out there waiting for the Fed to make a decision, I have to
wonder how this announcement actually affects my trading. Because I’m primarily
a short-term trader, it does not have that great an effect. It’s my belief that
consistently successful short-term traders (including daytraders and swing
traders) let the market guide their trades, rather than making predictions. When
you trade for a living, you need a system to bring in consistent income, so
there is not much room for speculation.Â
Based on this analysis, the Feds decision tomorrow will not affect my
trading. I prefer not to open any positions in the morning before any economic
announcement. I rather take the time to find entry points following a reaction.
Many traders I know enter a position before an announcement, banking on a large
quick gain. As most of my readers know, I’m not after that one big move to
secure me for the whole year. Successful trading, to me, is abut consistency. I
think that my father described it best when he used to tell me, “Just eat
the apple one bite at a time.”
Today’s Watchlist:Â
(
MENT |
Quote |
Chart |
News |
PowerRating),
(
IVX |
Quote |
Chart |
News |
PowerRating),
(
AGN |
Quote |
Chart |
News |
PowerRating),
(
CLRN |
Quote |
Chart |
News |
PowerRating)
Mentor Graphics
(
MENT |
Quote |
Chart |
News |
PowerRating) has served
us well in the past, beautifully breaking out of a pennant that it had formed on
the daily charts. On Tuesday, it broke out of an ascending triangle that it had
formed from a combination of intermediate-term and short-term trendlines. While
daytraders may try to catch the first breakout to new highs, swing traders
should watch for a new closing high on Tuesday, followed by a continuation move
tomorrow. Set your alerts roughly 1/4 point above a new closing high.
Ivax
(
IVX |
Quote |
Chart |
News |
PowerRating), in the biotech group,
broke out on Monday to a new high. On Tuesday there has been a tiny continuation
move, which some traders may consider an entry point. Look for it to continue
higher until it breaks a near-term trendline. Should it keep moving, we’ll take
a look at it once again. Use the five-day and 10-day MAs as trendlines until
something else is established.
Allergan
(
AGN |
Quote |
Chart |
News |
PowerRating), also in biotech, is continuing following
Monday’s move to new highs. It’s great to see some follow through moves on these
breakouts. Sadly, not many of the breakouts by the big boys (e.g., EMC, CHKP)
have shown any major continuations. Because of this overall negative sentiment
in the market, let’s continue to focus on locking in small gains. Hopefully,
some sort of trend will be established soon. If you open a position in Allergan,
consider placing an initial stop just under the top of the trading range. If you
have a little more financial leeway, you may want to consider placing an initial
stop just under the bottom of the recent range. Remember to always trail your
stops.Â
Clarent
(
CLRN |
Quote |
Chart |
News |
PowerRating) is approaching a low-level breakout area.
Set your alerts at 72 as we wait for a move. If it should breakout, look for
resistance just under 80. Remember to watch for intraday false breakouts. While
there can be greater profits by entering on the first move, it’s a lot riskier.
Again, I prefer not to speculate and to wait for a continauation.
Ready and waiting,
Waiting in the Wings: El
FedÂ
Check back at 2:00PM ET
for Trading The Techs PM.