The Next Time Your Trade Goes Profitable, Try This
How do I know when the
environment is anything but ‘high-probability?’ I personally look at
a couple tell-tales to keep on the sidelines instead of in the fray. It so
happens that today’s trade was telling me that it was indeed going to be ‘just
one of those days.’ I’m not here to tell you not to trade, but in my humble
opinion, the deck is stacked against you when you start seeing clues such as divergent price action in the indices, and more than a lil’ bit of profit-taking
in stocks that looked ‘oh so ready’ to make that next leg up…and in today’s trade we had both in place.
First, we had a weak Nasdaq that was seeing red–in large part due to the
semiconductor index (SMH). But, we also had some serious profit-taking in stocks
that had actually done a pretty good job of putting in what looked to be ‘the
next leg up’–only to fall apart. When I see action like that, and such was the case
in more than a handful of stocks today, I am more than happy to chill, rather
than take the spill. One representative of this type of price behavior was
Secure Computing
(
SCUR |
Quote |
Chart |
News |
PowerRating).
After two and one half weeks, SCUR finally
decides to move higher, after ‘securing’ its original breakout with a solid
consolidation.
Unfortunately, we are starting to see more of this type of action as we climb
up the ol’ trading tree with nary a pullback in the broader averages….
The moral of the story–in an uncertain environment that offers a
higher-probability of ‘profit-taking’, rather than outsized gains…remember to
‘secure’ those profits when you have ’em in place.