Clear As A Bell
Sometimes you just see things more clearly than other days, and perhaps that
was the case yesterday for me, or the fact that the intraday volatility was just
so immense, either way…damn, I hope everybody stepped up and took full
advantage of the wonderful trading. A bell-to-bell day, very rare, but immensely
profitable.
There were HVTs all over the place, and
several of the swing trades profiled in yesterday’s
column and nightly FN (Floyd Number) service
worked out very well. Look at stocks like Gold Fields
(
GFI |
Quote |
Chart |
News |
PowerRating), Citigroup
(
C |
Quote |
Chart |
News |
PowerRating) and Bank
of New York
(
BK |
Quote |
Chart |
News |
PowerRating):
I hope you
really took advantage of this “dual” setup. First off, fading the gap
down was good for roughly a point, accounting for slippage. The real kicker was
that the high of the day was an FN, which ALSO corresponded with a big rollover
in the S&P futures.
Yesterday’s
recommendation of a short on a move below 29.25 played out very well until that
market had that major reversal midday. However, with my trailing stop, I
salvaged nearly a point.
The Bank of New York (BK) trade was
mentioned in yesterday’s column. I strongly suggested that you have a trailing
stop in place, and if you did, you did not give back all your hard-won gains
when the market reversed off the KTN of
810-12 midday. Even with a trailing stop in place, I was never taken out of the GFI
trade.
Turning to some of the great HVT setups
yesterday, there were a lot. Naturally, focusing on one to two issues all day
was the most effective. You had your choice of stocks like IBM,
BRCM, C,
HD, MERQ,
UPS and EBAY.
With the range that the S&P and Nasdaq futures put up, it was not hard to
find entries and then get great follow through as the futures were propelled up
and down.
As of 5:30 AM PST, it appears as though the futures have a little footing to
them. How long that will last is anyone’s guess, however, always be on the
lookout for rallies intraday. They are powerful in a weak, oversold market like
this one. Witness the move off the 810-12 level midday (KTN) yesterday for an
example of just how powerful these moves are.
Looking at some potential longer-term setups based on an analysis of 15- and
60-minute charts, I came across the following:
Scientific Atlanta
(
SFA |
Quote |
Chart |
News |
PowerRating) — long
entry above $13.22
ACE Ltd.
(
ACE |
Quote |
Chart |
News |
PowerRating) — short entry below
$24.34
Genentech
(
DNA |
Quote |
Chart |
News |
PowerRating) — short entry below
$29.11
Goldman Sachs
(
GS |
Quote |
Chart |
News |
PowerRating) — short entry
below $71.51
Naturally, these trades require the overall direction of the market to be
with you and a protective trailing stop. Always remember, a trade suggestion or
an indicator are NEVER absolutes. Your ability to take the market’s temperature
as to its direction in the next 5, 10 or 30 minutes should always be the
ultimate decision for taking a trade.
Key Technical
Numbers (futures):
S&Ps |
Nasdaq |
| 842 | 991 |
| 838 | 975.3 |
| 829 | 962-64 |
| 815.40 | 952-53 |
| 810-12 (key) | 937 |
| 802 | 928 |
| 779 | 894.3 |
| 768 |
As always, feel free to send me your comments and
questions. See you in TradersWire.