A Ripe Opportunity
A
Friday afternoon reward during the beginning of summer trading?
That is exactly what the rumor mill threw us on Friday.
Just shortly after noon PST, a story hit the wires that ships were
pulling out of Mid East ports on reports of “imminent” terrorist
attacks. News like this offers
tremendous trading opportunities, provided the market has not already reacted to
the news. The 1-minute chart of the
September S&P futures below clearly indicates the market had not factored in
this news. This was a ripe opportunity.
Even if the rumor
was deemed to be false, the risk you took on getting short paled in comparison
to the reward. Most of the traders in our
office got short and did very well. I
managed to get short 1000 shares of Morgan Stanley
(
MWD |
Quote |
Chart |
News |
PowerRating) at Point A, and
pulled almost a point out on the trade. Not
bad for five minutes of work. In
hindsight, I should have tried to get more off, but with the markets being slow,
I wasn’t exactly ready to establish a large position.
While I don’t
expect to see other trades like that today, I suspect we will get some good
trading on the opening and may even retrace the remaining range from Friday’s
sell-off. The afternoon may be slow
ahead of the two day Fed meeting that starts tomorrow.Â
Choose your trades carefully if it does get quiet.
The elusive 1250
close still remains, although the futures indicate they may make a run towards
it on the opening, solid follow-through is essential.Â
The NASDAQ is hovering just above key support at 1757.Â
Initiating trades off these levels should prove productive.
While most of the
large-cap stocks I trade still look a little ragged on intra-day charts, there
are a few worth looking at:Â Texas
Instruments
(
TXN |
Quote |
Chart |
News |
PowerRating) is putting in a little bit of a base at $30, Morgan
Stanley
(
MWD |
Quote |
Chart |
News |
PowerRating) looks good above $65.10, EMC
(
EmC |
Quote |
Chart |
News |
PowerRating) is coming off a double
bottom at the $26.10 level. On the
downside, Merck
(
MRK |
Quote |
Chart |
News |
PowerRating) looks like it could fall below the gap-down low of $68
set on Friday.
Â
Â