Roller Coaster Ride Continues
It was another roller coaster ride for the market.
With continuing shortfalls in the tech sector and a news item indicating that
the FBI apprehended a known terrorist for allegedly plotting to build and
detonate a dirty bomb, the market offered some good setups intraday. Oddly, with
all the “uncertainties” floating around, gold and gold shares continue
their recent pullback. These stocks are getting interesting in here.
Naturally, the stock du jour continued to be Tyco
(
TYC |
Quote |
Chart |
News |
PowerRating). With just over 50 million shares traded and ample range, it was an HVT
dream. I spoke with some colleagues after the close about TYC
and they indicated that they are not comfortable with the way TYC trades. That
is an excellent point. Sometimes the way a specialist handles a stock does not
fit with your overall personality or risk tolerance. That is fine. However, do
not walk away from a stock that easily. Trade it a few times before throwing in
the towel. New and old traders alike have a tendency to want immediate
gratification. Don’t expect to show up at the party and be first in line for the
punch. Survey the crowd (market) and the bartender (specialist) to see how
things are working. Charts only tell you so much. Â
In my experience over the years, my profitability on a daily basis goes down
relative to the number of stocks I trade in that given day. Yesterday was an
excellent example. After getting back from a few days off in the wake of my new
son, I was ready to attack the market. I did, trading TYC very assertively and
did well. However, I got sidetracked and traded three other stocks throughout
the day while continuing to trade TYC. The result: a great day in TYC offset
substantially by trades in other stocks. These trades were the ones where I just
showed up expecting to get some punch. You can bet today will be very different.
My suspicion is that I will trade only one to two stocks today.
Naturally, keep an eye on Intel
(
INTC |
Quote |
Chart |
News |
PowerRating) intraday. Since their bombshell last week, there have been a few
instances where INTC lead the futures. The SOX is also a good leading indicator
at times.
Yesterday marked the first day of the launch of The
Floyd Numbers. For those of you not familiar with the service, click
here. I invite you to take a one-week Free Trial. I trust you will find
these a fantastic complement to your existing strategy, whether you are a
daytrader or position trader. In addition to getting potential support and
resistance numbers on HVT stocks, I also provide additional commentary alerting
you to potential areas that offer entries for multiple time frames. For
instance, I came across multiple key levels for the Semiconductor
HOLDRs
(
SMH |
Quote |
Chart |
News |
PowerRating) which are posted. There is also a message board
provided to all subscribers so that I, as well as other subscribers, can answer
questions regarding the effective use of the numbers. Check them out. I use them
every day, and they have made an enormous difference in my trading.
Key Technical
Numbers (futures):
S&Ps |
Nasdaq |
| 1058 | 1202-05 (solid resistance) |
| 1047-48 (significant confluence and resistance)Â |
1178-79 |
| 1039 | 1152-54 |
| 1032Â | 1134 |
| 1017-19 (very key) | 1117-22 |
| 1008-09 (contract low and technical support) |
1105 (contract low) |
| 1054 (projected support) |
As always, feel free to send me your comments and
questions. See you in TradersWire.