Trying For The Top The Easy Way
When the market gets extended,
and I’m not as confident about ‘who is
winning the war’ in today’s battle, there’s only one thing that I can do: Continue
to trade the high-probability setups as they trigger, but not a ‘tickee’
sooner.
After yesterday’s thrust higher on very strong
institutional volume, it’s obvious that the bulls have control of the ongoing
‘confirmed rally’ — but it’s also happening a bit late into the month-long rally
for me to get really excited about the short term, as far as fresh purchases are
concerned. My attitude at this juncture is to take the quality breakouts if
they are still triggering, but really focus on ratcheting down any position risk
at the slightest hint of trouble. For instance, if a 7% stop loss is normally
used, I personally would reign in this amount to a smaller money-stop figure,
and let the position prove to me that it can still ‘show me the money’ — this
late in the game.
This attitude also sets up my focus on potential
shorts, as the higher probability looks to be to the downside for at least a
couple of sessions, while market participants digest their portfolio gains. I
could be wrong, I might be right — I honestly don’t know. But, I do know that
regardless of what I think is in the cards, that the only guarantee of keeping
it real is through the continued use of our disciplined, consistent daytrading
tactics.
10:29:43
Reversal Setup
The semiconductor HOLDRs (SMH)
have enjoyed a solid a move of over 12% since its December lows. This action
had the sector proxy testing the 78% Fibonacci retracement from its December
Highs in yesterday’s trade. With today’s action, an extended uptrend line has
been broken as the SMH consolidates in a potential
Slim Jim pattern. Triggers for potential short entries below pattern
supports are set at 42.53. Currently, the SMH is down .18 at 42.71.
12:14:47
Intraday Update
The semiconductor HOLDRs (SMH)
have enjoyed an even stronger run since our first alert–and, I couldn’t
have been more wrong…but as Dave Landry likes to say, ‘No Tickee, No Tradee.’
Subsequent action has the sector proxy consolidating off session highs at 43, up
.10. With some technical signs of deteriorating strength based on bollinger
band, volume, and stochastics analysis ( 5 and 30 minute charts), shorts might
be considered below consolidation lows of 42.94.
I guess that thanks would go out to Messrs. Landry and Haggerty for this
little peace of mind, ’cause obviously I must have been out of mine….nah.