Complacency Has A Limited Shelf Life
The modest trading continues. Trading was
certainly far better than Friday, but still muted in comparison to what I would
consider a more average session as defined in terms of volume and volatility.
Regardless, you can still identify trades throughout the day which allow you to
profit. If you are consistently losing in this market, you need to sit yourself
down and do some reevaluating. These markets demand only one of two outcomes
from traders to ensure that you are there when the music starts again:
- Make modest process on a day-to-day basis
- If your trading acumen has not progressed to a level of consistency,
simply do not trade. This is an ideal time to hone your skills.
Complacency, like all things in life, has a limited shelf life. One of these
days when we least expect it, the market will awaken. For those who navigate
through this current environment, the payback for this quiet period will be paid
in spades.
Looking at some setups off the opening, I will be keeping an eye on these
"story" stocks for a potential fade off the opening print. Bear in
mind, these trades carry a fair degree of subjectivity, it is not as simple as
buying the gap down or shorting the gap up. The prudent trade demands that you
properly assess that the buying or selling pressure has abated. Secondly, these
are trades, not investments. You will notice that these trades go completely
countertrend, defying my most important rule. However, as Tom Basso says:
"Follow your rules, follow your rules, know when to break your rules."
Exxon Mobil
(
XOM |
Quote |
Chart |
News |
PowerRating): Missed earnings by
a wide margin, expect gap down with modest bounce.
Pulte Homes
(
PHM |
Quote |
Chart |
News |
PowerRating): Beat earnings
estimates by wide margin, expect gap up with modest pullback.
Schering Plough
(
SGP |
Quote |
Chart |
News |
PowerRating): Received
approval to market Claritin over the counter. Stock up in pre-market.
Key Technical
Numbers (futures):
S&Ps |
Nasdaq |
| 1126 | 1388-89 |
| 1116 | 1361-64 |
| 1106-07 | 1339 |
| 1100 | 1326 (contract low) |
| 1089 | 1306 |
| 1078 | 1288 |
On Wednesday, the last piece of the four-part series on Single
Stock Futures (SSFs) will appear. This week I will be discussing some
of the strategies I plan to employ. These products have suddenly opened up
several more approaches that will not only complement my existing style, but
also offer a few stand-alone strategies. Click
here to see the first 3 installments.
As always, feel free to send me your comments and
questions. See you in TradersWire.