This Is Always A Bullish Sign
Monday, after a somewhat difficult day of trading, I played tennis. Towards
the end of the second set, I managed to roll my ankle and sprain it. It’s not a
big deal, but it has made the past two days rather uncomfortable. Trying to sit
at my desk and trade while keeping my throbbing foot elevated has been a real
pain.Â
Question #1:Â Who
cares?
Answer: My wife. She
considers me basically useless if I’m unable to carry heavy things.
Question #2:Â Who
doesn’t care?
Answer:Â The New York
Stock Exchange, American Stock Exchange and Nasdaq.
Although
they weren’t aware of my little mishap, even if they were, they would not have
volunteered to slow down the trading, or shorten the trading day to accommodate
me. The market opens at 9:30 a.m. and closes at 4:00 p.m. and if you aren’t
ready/feeling well/awake, it doesn’t care. Your stocks will trade whether you
are watching them or not.
Daytraders, by nature, are in cash every night. If something happens that
prohibits them from trading, or if they simply don’t feel like trading, they
always have the option of taking the day off. This is one of the great appeals
of daytrading. Position traders must plan for those times when they are unable
to babysit their positions, whether it’s due to a vacation, a malady worse than
a sprained ankle, or something else. While not a perfect solution, stop orders
can suffice in most cases. I was speaking with a friend recently who told me
that his broker still does not accept stop orders for Nasdaq traded
stocks. If you are a position trader, I would highly recommend you find a broker
that does. There are plenty of them out there. Making sure you have all your
bases covered will help to avoid any additional anxiety during emergency
situations where you cannot watch the market.
Now that
you know how the last two days were for me, let’s talk a little about the
market. (Not too much, I need some couch-time.)Â The pullback that started on
Friday didn’t go too long or too deep before reversing and trying to move back
up towards last week’s highs. The market still has a way to go, but so far, so
good. Yesterday’s volume was a little light, but today was good. The real reason
I am encouraged by the action of the last two days can be seen in the charts
below.
It is
always a bullish sign when markets are able to consistently finish the day near
their highs. This is exactly what we’ve seen the last two days, as late-day
rallies arrived around the same time as Maria Bartiromo (although I’m not giving
her any credit for this). Along with other market internals that I watch, this
action leads me to believe that the long side remains the place to be.
Best of
luck with your trading.
Rob
Hanna