Look At How BULLISH These Charts Are!
Editor’s Note: This is hilarious!
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My recent bearishness seems to have pissed off a few of you. Therefore, in
tonight’s column I will only talk about how bullish everything is.
Smoke ’em If You Got ’em
As I’ve mentioned in the past, money management–the use of protective stops, trailing stops, and profit taking–is crucial to your long-term success as a trader. A simple money management system is to take at least half of your profits when they are equal to or exceed your initial risk. You then move you protective stop on your remaining shares to breakeven. This way, barring overnight gaps, you have a “free” position that has the potential to turn into a homerun (through the use of trailing stops).
Let’s follow up on Cymer
(
CYMI |
Quote |
Chart |
News |
PowerRating), a stock mentioned
recently. I was “bullish” on this stock because it was in a longer-term persistent
“uptrend” and had begun to pull back. Notice that it triggered an
entry and began to “rally” out of the pattern. On Friday, the stock
continued to rally, getting close to over 2 points from the entry(a). In this
case, partial profits could (and should) have been taken and the stop could have
been moved “up” to breakeven–the same as the entry.
Once again, if you’re new to momentum based swing trading and would like more information on the basics such as trend, entries, and money management, email me and I’ll be happy to send you the primer section from my second book.
On Friday, the Nasdaq gapped higher and
“rallied” in early trading. Then after trading sideways for much
of the day, it “rallied” going into the close.
This action puts it at new “highs” for the
year.
The S&P also “rallied” nicely. This action
also puts it at new “highs” for the year.
So what do we do?
As you can see, the
indices are in solid “uptrends.” However, since they are now very
“overbought” you probably should continue to manage existing
“longs” vs. attempting to establish new ones. Therefore, continue to take partial profits and trail stops
“higher”.
No setups tonight. All joking aside, for the brave and
nimble daytraders, if the indices gap sharply lower on the open (i.e. a panicky
“throwing in of the towel”), watch for an early morning reversal.
Should that occur, it would also be a good time to lock in additional profits
(i.e. scale out) of existing shorts.
Best of luck with your trading on Monday!
Dave Landry
P.S. Reminder: Protective stops on every trade!
P.P.S. My new 20-hour course is now shipping.
Click here to learn
more, or to order..
Editor’s Note, Part 2: Before
you enter these stocks long on Monday, check your own charts!