Daytraders benefit from short-term volatility
The SPX closed at 1298.77,
+0.1%, with the $INDU down seven points (-.04%) to 11,340. The QQQQ, 38.43 and $COMPX,
2150, were almost unchanged from the previous day also. NYSE volume remains on
the light side at 1.21 billion shares, with the volume ratio 56 and breadth
+552. It is safe to say the players didn’t show up to play the game yesterday.
In fact, the SPX has traded in a narrow range–1302.49 – 1293.56–since last
Wednesday. This will be resolved shortly. There are some time factors that come
into play at month-end, the first few days after the Labor Day weekend, and then
9/11. Daytraders made money yesterday in some of the focus list energy (
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ECA |
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PowerRating),
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MRO |
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PowerRating)) and healthcare stocks (
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HUM |
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PowerRating),
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DGX |
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PowerRating)), in addition to a quick
6-point move down from the “ledge” following the 1302.49 SPX range high. Energy
stocks will continue to get bought on weakness and at every saber rattle by
Iran, so daytraders will continue to prosper in this sector. When the $US heads
south–which it will–gold will take off again.
The market is ranging and it is the dog days of
summer, so the trading opportunities are obviously less frequent. The better
decision is to back off until the range is resolved and a new short term trend
begins, and it doesn’t matter in which direction. Resorting to scalping just to
get more trades is simply a bad decision for the majority of traders. The Middle
East turmoil won’t go away, “unless…” so trading will continue to be very
erratic and much more short-term oriented. Let position traders beware or else
learn how to use options. Daytraders will benefit from the short-term
volatility.
Have a good trading day,
Kevin Haggerty