When To Step Up To The Plate…And When Not To
The opening was a little quieter than I had anticipated yesterday. Upon
reflection, it looks like the technical damage was done via the gap lower,
rather than
by slugging it out to the downside during normal trading hours. There was not
even a “Fade The Gap” trade, which is unusual given how much the market gapped
lower. It appears (for lack of another plausible explanation) that the war has
the market on perma-hold, at least in terms of tradable price action. Nonetheless, there are always a few opportunities on the opening. I trust you
are taking advantage of those before the action gets too quiet.
What is lacking currently is what HVT trading requires, 3 point spikes on the
one-minute chart. Take a look at yesterday morning’s action, there were no
quick volatility spikes that were tradable.
Contrast that action with the action from the opening last week:
Let’s face it, we are in an environment that is spotty at best. Great
trading days, followed by a few days where there is not much else going on. It
is our responsibility to step up to the plate when the volatility is there so as
to ride through the quieter periods.
Luckily, which is part of the reason I had mentioned it, the longer-term
trades played out. Abercrombie and Fitch
(
ANF |
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PowerRating),
which initially was down pretty good, came roaring back. Staples
(
SPLS |
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PowerRating) — which for some reason did not make it into the column
yesterday — was also on the short list, and it finished unchanged on the day. Keep in mind, however, these are not trades where I am judging their
effectiveness after one day. The trades were derived from looking at daily
and/or weekly charts and my time horizon, absent being stopped out, is several
days or more.
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* Indicates a level that is more significant
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