TradingMarkets Top 5 Of The Day

Welcome to TradingMarkets.com Top 5 of the Day!

In this nightly feature, the editors of
TradingMarkets select the 5 best and most insightful (and sometimes humorous)
excerpts from all of the articles and blogs that have been published throughout
the entire day.

Here are today’s selections:

Brett Steenbarger from:

How the flu pandemic impacts your trading

“…Fear
begets fear. Long before we could possibly know whether outbreaks of
transmissible H5N1 virus pose a serious pandemic threat or not, people–and
markets–will likely react. Indeed, in the wake of accusations of hurricane
ineptitude, governmental authorities and helping agencies might even overreact.
As a psychologist and trader, my job is to observe panic–not participate in it.
I keep my pulse on the emotions of the marketplace and prepare myself for the
days, like last week, when I might have to rein in my desire to pick bottoms…..”
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Gary Kaltbaum from:


A bounce but…

“…Whether
a bounce occurs or not, it is negative that fewer and fewer stocks are working.
The most important point that I will continue to hammer away at is that
regardless of any bounce, FEWER AND FEWER STOCKS CONTINUE TO CARRY THE DAY…AND
THIS TYPE OF HUGE NEGATIVE DIVERGENCE ALMOST ALWAYS LEADS ULTIMATELY TO LOWER
PRICES. About 4 out of 10 stocks are in good technical shape…and that is being
nice. If there is one indicator that needs to be watched…it is how many stocks
are in good technical shape. It is a negative that more and more sectors
continue to go into the negative side of the ledger. In fact, I am down to a
handful of sectors in good technical shape. It is a negative that the DOW is now
WAY below its longer term moving averages and recently made a lower high as well
as breaking support. It is a negative that the S&P also made a lower high, broke
support and now trades below its longer-term moving averages. The good news is
that the S&P is only a stone’s throw from getting back above the moving
averages…but that still won’t change the overall negative conditions.
…”
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Melanie Hollands from:


Watch SUNW, here’s why

“…Even though SUNW
had an attack of six month highs, it continues to get slapped back by its upper
channel — resistance at the $4.5ish area. Losers continue to dominate the stock
and no feelings of “fear of missing” the next move are showing up. If it settles
down in this range and achieves a closing basis over $4.5 (with a daily trading
range starting at $4.25 and ending at $4.5) then it will paint a different
story. A bullish story! That will show buyers have been pulled to the edge of
their trading seats and will reach for the stock. That’s what I call “fear of
missing”….”
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Rob Hanna from:


Need a big edge? Use the 200-day MA wisely

“…As you can see, even with our
lame exit strategy, this system would have performed quite well when buying
pullbacks above the 200-day moving average.  When trading below the 200-day
moving average, though, every statistic takes a significant hit.  So what does
this tell us about how we should adjust our trading in a downtrending
environment?  While money can still be made, it becomes much more difficult —
even when buying pullbacks in the hope of a short-term gain. Should the market
fail to regain the 200 MA, the downtrend will begin to assert itself. The fact
that the market is downtrending creates additional risk and that should be taken
into account when evaluating potential trades….”
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Austin Passamonte from:

I’m bullish when I look at this monthly chart…

“…Bullish
perspective: the monthly chart for S&P 500 shows us many different things. First
of all, it has been a very methodical climb from early 2003 lows (Iraq invasion)
to recent highs. Lowest level of pertinent support right now is roughly 1128,
followed by 1072 and lower from there. It is not out of the question for prices
to hit 1018 or even 965 before a years’ long bounce ensues from there. Adjust
your eyes & mind here… this is a monthly chart….”
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