The ‘Ideal Trading Conditions’ I’d Like To See Today
Yesterday I was on Gary Kaltbaum’s radio show
talking about the current state of the market. We both were amazed at
this rally and were wondering if there would ever be a pullback. While it is
impossible to know the length and duration of the rally, if you are long, just
sit back and enjoy, if you have been short, have your head examined. As I have
mentioned, I barely have any long positions, a couple of positions in Argentina,
Brazil and Japan with a couple of currency plays in Australia and New Zealand. I
know as a trader you just need to check the opinions at the door and simply
trade the trend, however, my conviction with anything longer than an intraday
trade is nonexistent. In the meantime, I will hang out on the sidelines and
watch others enjoy their winnings from the current thrust higher.
Looking at yesterday’s action, we were fortunate to grab a couple of very
“solid” entries on the opening which were then followed by a one-way
market — up. Other than scaling out of half a position after the opening burst
higher, there was never a real reason to exit. It was one of those rare days
where there were virtually no pullbacks.
As you can see, once the entry point was triggered, GS never looked back. The
powerful move in the S&Ps certainly helped.
The same scenario played out with EDS. Thank
the S&Ps for a 2.5 point gain with hardly a pullback.
In addition, I took one HVT setup off the
ISM Number at 10:00 AM EST. See the chart
below.
Looking ahead to today, despite the tremendous move higher, trading still
remains a very selective procedure, at least in my mind. These moves higher are
not exhibiting the same rapid range-expansion bars that are the
“ideal” conditions for HVT.
Nonetheless, with discipline and focus, there are a handful of opportunities
each and every day.Â
Going into today’s session, keep an eye on these stocks as potential intraday
longs.
Omnicom
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As always, feel free to send me your comments and questions.
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