Remain Disciplined
Each evening we focus on the most interesting aspects for the upcoming trading day. The comments are based on observations of the nightly updates of the Stocks/Sectors and Market Bias pages. They are provided for educational purposes only and are not intended to be direct trading advice. Also, keep in mind that these remarks are made up to 12 hours in advance of the markets opening. Therefore, overnight events may alter the outcome of these observations.
At the time this is being published, the S&P Globex Futures are trading 2.10 points lower and the bond market is trading up 2 ticks.
Heads up, the Fed is scheduled to meet tomorrow. The masses believe that they won’t do anything because of Y2K. This may be true but expect extreme volatility just in case.
Trading for Christmas? I have a confession to make. With only a few shopping days left until Christmas, I’ve found myself “trading for Christmasâ€. I entered a trade, and thought, hey I could get that great new PDA (i.e. Palm Pilot model XXVII or whatever the ever changing latest model is) or possibly a new laptop computer. Maybe another trade and I could surprise the wife with a tennis bracelet. I suppose I’m not alone though. A friend of mine runs a very successful hedge fund. He told me that he could make money for 11 out of 12 months and keep his customers happy unless that one losing month was December. The truth is the market does not care what’s on your shopping list. Stick to your guns, trade in a manner in which you are comfortable, remain disciplined and forget about Christmas.
Purchase Pro [PPRO>PPRO], mentioned last night, still looks poised to resume its strong uptrend.
On the Pullback List, Commerce One [CMRC>CMRC] is a Trend Knock Out (a stock in a strong uptrend that trades below the prior two lows) that closed well and looks poised to challenge its old highs (I realize this one is expensive but feel it is a worthy example and fun to watch). Sykes Enterprises [SYKE>SYKE] appears to be rallying out of pullback.
For you breakout players, Intervoice [INTV>INTV] appears to be consolidating at higher levels and looks poised to break higher. Globix Corp. [GBIX>GBIX], on the Proprietary Momentum List, is a similar pattern.
As you know, the Trading Where The Action Is List contains the most volatile stocks and is only for the most aggressive traders who are willing to assume a higher degree of risk in order to capture larger gains.
With that said, Verity [VRTY>VRTY] looks poised to resume its meltdown (possible shorting candidate). Chemdex [CMDX>CMDX] seems “wound up†(i.e. that the short-term volatility has contracted and is poised to explode) and ready to expand in the direction of its underlying uptrend.
On the short side, Tandy Corp. [TAN>TAN] is a stock pattern I call the Tom Petty (because its “Free Fallinâ€).
Best of luck with your trading on Tuesday!
PS – Reminder: Protective stops on every trade!