Before Shorting, Here’s What I’d Like To See
From
a market standpoint, today was bad. Things are beginning to
look worse and worse. This was the fourth distribution day in the last seven
for the Nasdaq. The Nasdaq also closed below its 50-day simple moving average
for the first time since mid-December. The bounce that we were expecting turned
out to be more of a pause. Many stocks have broken down in the last week and
a half. Those few stocks that have attempted to break out have been smacked down
pretty good. I’ve even seen some short opportunities that have begun to
follow through.
I’m not quite ready
to throw in the towel on the long side just yet, but I would be very, very careful
about new opportunities. Wait to see some accumulation in the market and some
follow-through on individual issues before going back to aggressive mode. I
would also like to see a bounce before doing any heavy shorting. In other words,
I don’t know just what the market is going to do right now but I’ll
let it clue me in some more before making any large bets.
Today is my one-year anniversary
column. I’ve been “Putting It All Together†two days a week
for 12 months now. A little over a year ago, when I was first speaking with
Larry and Brice about the possibility of doing a bi-weekly column, my biggest
concern (which I didn’t share with them) was that I would quickly run
out of things to talk about. When I started I had about 5-10 columns in my head,
which I knew would last about 2 months. Well, it’s been 12 months and
I still have more to say. So far we’ve covered a huge range of topics,
including:
- Risk management
- Handling gaps
- Alternate entry
techniques - How to find home-run
trades - Setting stops]
- Trading in low-priced
stocks - Scanning techniques
- Using industry
groups to spot potential candidates - Fundamentals
- How technicals
lead fundamentals - Handling news intraday
- Managing watch
lists - Mental aspects
of trading - Measuring market
health - Preparation
- Keeping a diary
- Busting slumps
- How to learn from
your trades
Several of these topics I will revisit,
and I’ll also continue to add to the list. Many of the ideas I’ve
had for columns came from questions and comments that traders sent me via email.
I’ve fully enjoyed this first year and look forward sharing more of my
thoughts with you as we continue forward. The market is ever changing and no
matter how experienced of a trader you are or how well you’ve performed,
there is always more to learn. Thanks to all of you for your support.
Good trading,
robhanna@rcn.com